Medicare historically reimburses hospitals below the cost of providing care to patients, but payments to hospitals fell to a record low in 2022, according to new data provided by the American Hospital Association.
Four things to know:
1. An AHA analysis published Jan. 10 shows that Medicare paid 82 cents for every dollar hospitals spent on care for Medicare patients in 2022 — the most recent year for which data is available.
2. Medicare underpayments to hospitals hit $99.2 billion in 2022, almost two and a half times the amount in 2012, according to the report.
3. The Medicare Payment Advisory Commission noted that hospitals' overall fee-for-service Medicare margin dropped to a record low in 2022 and expects low fee-for-service Medicare margins to persist.
4. Hospitals' fee-for-service Medicare margin decline was driven by higher-than-expected inflation, reduced uncompensated care payments and the reinstatement of Medicare sequestration, according to MedPAC. One offsetting factor was higher payments for 340B drugs.
Click here for more details on the report.