Blog: Uncompensated care increases, Medicare DSH cuts to exacerbate hospitals’ challenges

As millions of people are losing their Medicaid coverage as a result of the redetermination process, hospitals and health systems are seeing substantial increases in uncompensated care and facing new Medicare cuts that will exacerbate their financial challenges, according to a AHA blog post published Sept. 20. The median rate of uncompensated care for hospitals nationally increased by a third from 6.4% in the first quarter of 2023 to 8.7% in July, according to data from Syntellis Performance Solutions.  
 
In addition, despite the foreseeable impact the loss of Medicaid coverage would have on hospitals serving a disproportionate share of low-income patients, the Centers for Medicare & Medicaid Services recently finalized nearly $1 billion in Medicare funding cuts to disproportionate share hospitals. These cuts from CMS are predicated on the assumption that the uninsured rate will decline in fiscal year 2024 despite the ongoing redeterminations and recent Congressional Budget Office projections to the contrary.  
 
“It is imperative that patients continue to have access to care regardless of their ability to pay,” the blog states. “These payment cuts threaten the financial stability of hospitals across the nation, forcing many to consider shutting down vital service lines or risk closing their doors altogether. At a minimum, the Medicaid eligibility redetermination process should be allowed to finish before these Medicare cuts are enacted.”