Hospitals provided majority of uncompensated care in 2013

Hospitals provided $44.6 billion, or nearly 60 percent of the $74 billion in uncompensated care delivered last year, according tostudy published in Health Affairs.

Researchers, led by Teresa A. Coughlin, a senior policy fellow at the Health Policy Center, Urban Institute, analyzed data from the Medical Expenditure Panel Survey and published secondary data from both provider and government sources to arrive at the figure, according to the study. The remaining uncompensated care came from publicly-supported providers (26.4 percent) and office-based physicians. Government reimbursements for uncompensated care were as high as $52.6 billion, or 70 percent of total care.

Medicaid paid $13.5 billion for uncompensated care in 2013, while Medicare disproportionate share hospitals (DSH) and indirect medical education payments were responsible for a total of $8 billion, researchers found. Private insurance covered $21.8 billion in uncompensated care. While their analysis could underestimate the latter amount, researchers wrote, $21.8 billion only represented 2.4 percent of private insurers' expenditures last year, and hospitals' ability or desire to shift uncompensated care costs to private insurance "var[ies] widely."

"For example, it could be the case that in some highly competitive markets, a hospital would absorb uncompensated care costs as a loss and implement cost-cutting measures in response, whereas in other markets, a health plan would pay for the care, ultimately passing its costs on to subscribers through higher premiums," the study's authors wrote.

Teaching hospitals, which are able to negotiate higher payments from insurers as costs increase, "do not seem to exercise this power in a major way," the study noted.

The study comes as Medicare and Medicaid plans to cut DSH payments by 28 percent and 50 percent, respectively, over the next five years, according to a statement from the Hospital Financial Management Association. Estimates earlier this year by the American Hospital Association put total uncompensated care at $45.9 billion in 2012, which was up nearly $5 billion from the previous year, FierceHealthcare previously reported.

To learn more:
- here's the study abstract
- read the HFMA statement

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