Government Programs Don’t Cover the Cost of Caring … Hospitals Need Support, Not More Payment Cuts That Would Jeopardize Access to Care and Services

The federal government has a history of reimbursing hospitals below of the cost of providing care to patients.

For Medicare, which covers more than 60 million people, new data shows that the program paid a record-low 82 cents for every dollar spent by hospitals caring for Medicare patients in 2022 — the most recent data available. This resulted in about $100 billion in Medicare underpayments that year alone. The federal government’s own Medicare Payment Advisory Commission recently agreed that Medicare margins hit a record-low that year.

This chronic underpayment combined with hospitals experiencing over the last several years skyrocketing expenses for the cost of providing care, fighting against growing cybersecurity threats, and ensuring patients have access to cutting-edge services and treatments, just to name a few, continues to put hospitals’ ability to provide quality and accessible care 24/7 to all who need it at risk. Chronic underpayments also hobble the ability of hospitals to reinvest in people and communities, expand or upgrade facilities, or to pursue the research and technological advances that advance health for all.

That’s why it is imperative that Congress reject any further funding reductions that would reduce access to the critical patient care services hospitals and health systems provide in every community across the nation.

Last week Congress again voted to push back its deadline for funding the federal government for fiscal year 2024 by adopting another continuing resolution that extends current funding levels through the beginning of March.

As we have been sharing with you through our various communications channels, a number of important issues affecting hospitals and health systems are being considered as part of this package. These include preserving the moratorium on Medicaid disproportionate share hospital cuts and staving off harmful so-called site-neutral payment policies that don’t account for the differences in the care hospitals provide 24/7.

For many months, the AHA — with the support of hospital and health system leaders — has worked tirelessly to educate lawmakers on these important priorities. Please visit our Advocacy Action webpage for the latest resources, studies and tools on these and other priority issues.

The upside to Congress’ repeatedly kicking the can down the road is we now have several more weeks to keep telling the hospital story and educating lawmakers.

We’re doing this several ways:

• Our team is meeting with senators and representatives in Washington.
• We’re organizing meetings with key legislators back home during which hospital leaders can deliver the real-world impact of what additional funding reductions would mean to care and services in their communities.
• We’re producing new research and reports illustrating how additional funding cuts would push many hospitals, especially those serving rural and underserved areas, to the edge.
• We’re sharing our message with the media, and the Coalition to Protect America’s Health Care, of which the AHA is a founding member, continues to amplify our message through advertising and grassroots efforts. 

AHA members can hear the latest from Capitol Hill during a special advocacy update virtual session with AHA leaders on Jan. 31.

The next five or so weeks are a critical stretch as this could be one of the only chances for health care legislation to move until after the election.

Your voice makes a real difference. You live, work and, most importantly, vote in their districts and states. You have their attention.

Please see our recent Action Alert  which provides more information and resources that you can use when talking to your elected officials. You also can share this link and encourage others to send a message directly to their lawmakers.