In recent years, the healthcare industry in the United States has been facing a perfect storm of challenges, creating significant obstacles to the provision of quality and accessible care for patients and communities. Under these circumstances, it is crucial not to implement flawed policies like the proposed Medicare cuts that jeopardize the unique services hospitals offer their patients and the indispensable roles they play in their respective communities.
Proposed Medicare Cuts Threaten Patient Access to Vital Care
Currently under consideration by Congress are several pieces of legislation including the proposed Medicare cuts that could result in billions of dollars in additional Medicare payment cuts for services provided by hospital outpatient departments (HOPDs), a published article in the Hill reported.
The proposed Medicare cuts, which they also call “site-neutral” policies, if enacted, could severely restrict patient access to vital healthcare services, particularly in underserved and rural areas that are already grappling with limited medical resources.
The proponents of site-neutral payment policies argue that hospitals are overpaid for their outpatient services to Medicare patients. However, this idea is far from accurate.
Medicare underpays hospitals for the cost of caring for patients. According to the American Hospital Association (AHA) survey data, hospitals received only 84 cents for every dollar spent on caring for Medicare patients in 2020.
Despite these already precarious margins under the proposed Medicare cut, outpatient rates have increased by only 7.5 percent between 2019 and 2022, while hospitals’ expenses have risen by a staggering 17.5 percent during the same period.
Consequences of Proposed Medicare Cuts
The consequences of these proposed Medicare cuts could be devastating, particularly for patients in rural and medically underserved communities. Many rural hospitals heavily rely on government payers, with Medicare contributing nearly half of their revenue.
Chronic underpayments from Medicare have already contributed to the closure or conversion of at least 149 rural hospitals since 2010. Additionally, other alternative care facilities often avoid setting up in rural or urban areas with a lower commercial insurer patient mix.
Implementing further site-neutral cuts would exacerbate financial hardships, leading to reduced access to essential services and, potentially, more hospital closures due to the proposed Medicare cuts.
Hospitals and health systems are synonymous with healing, hope, and health. When people see the familiar blue and white “H” symbol, they find comfort in knowing that help is readily available 24/7, 365 days a year. It is imperative for individuals to understand the stakes involved.