Uncompensated care, underpayments to hospitals continue to climb

The amount of uncompensated care increased to $36.4 billion in 2008, up from $34 billion in 2007, according to a new report released by the American Hospital Association. Despite the rise in dollars, the percentage of total expenses that uncompensated care -- the sum of bad debt and charity care provided -- accounted for remained at 5.8 percent for the second-straight year. The results are based on data from 5,010 registered community hospitals across the U.S.

A second report from the AHA noted that Medicare and Medicaid combined to underpay those hospitals $32.4 billion in 2008 -- $22 billion from Medicare and $10.4 billion from Medicaid. That number was up from $31.9 billion in 2007. More specifically, hospitals received "only $0.91 for every dollar spent by hospitals caring for Medicare patients" last year, while that same number for Medicaid stood at $0.89 for every dollar spent by hospitals caring for Medicaid patients, the report points out. 

All of these numbers add up to a disturbing trend of underpayment. Since 2000, the uncompensated care cost for those surveyed hospitals rose by almost $15 billion; underpayments from Medicare and Medicaid have risen by nearly $28 billion since 2000. Last year, Milliman Inc. determined that such low reimbursement rates lead to higher health insurance costs for consumers and employers. 

To learn more:
- read the AHA's fact sheet on uncompensated care
- read the AHA's fact sheet on underpayments by Medicare and Medicaid

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