Las Vegas' Public Hospital Sees Major Federal Payment Cuts Under Health Reform

The CEO of University Medical Center, Las Vegas' public hospital, said the hospital stands to lose tens of millions of dollars a year in federal funds under health reform, according to a report by the Las Vegas Sun.

A spokeswoman for the National Association of Public Hospitals and Health Systems, the hospital's trade group, said UMC CEO Kathy Silver's predictions seemed too pessimistic but the trade group's own reading of the law also suggested a significant loss for the hospital.

The association said public hospitals would retain 60 percent of Medicaid payments by 2024, which would mean more than $17 million a year in federal funding cuts for UMC.

The law lowers federal support for uncompensated care to account for more coverage of the uninsured, but Ms. Silver noted that illegal immigrants won’t be covered by the expansion and they account for about $40 million of the hospital's uncompensated care.

And while the law would require U.S. citizens to buy health insurance beginning in 2014, Ms. Silver noted that the initial penalty for noncompliance is $95 a year or 1 percent of an individual’s taxable income, whichever is greater, which is just a fraction of what the premium would cost. That penalty, however, rises in 2016 to $695 a year or 2.5 percent of taxable income.

Read the Las Vegas Sun's report on health reform.