In 2012, Medicare and Medicaid shorted hospitals by about $56 billion, according to new data released by the American Hospital Association.
The AHA defined an underpayment as the difference between costs incurred and reimbursement received for delivering care to patients. Costs included personnel, technology and "other goods and services."
Of the $56 billion in underpayments, Medicare represented $42.3 billion, and Medicaid was $13.7 billion. Based on the 5,723 registered U.S. hospitals, the average combined Medicare and Medicaid underpayment per hospital was approximately $9.8 million.
According to the AHA, these figures meant hospitals only received 86 cents for every dollar spent on Medicare patients. Medicaid, which normally shorts hospitals the most of the two government payers, was slightly better at 89 cents on the dollar. However, Medicare cuts to hospitals have increased under the Patient Protection and Affordable Care Act, leading to Medicare payment updates that fall below the inflation rate.
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