- A Government Accountability Office (GAO) report released Monday found the federal government paid hospitals almost $50 billion annually during fiscal years 2013 and 2014 to offset uncompensated care (UC).
- Tax benefits also contribute billions of dollars each year to tax-exempt nonprofit hospitals, according to the GAO.
- House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Senate Finance Committee Chairman Orrin Hatch (R-UT) requested the report.
Uncompensated care costs at hospitals are a "longstanding concern" as they threaten financial stability, according to the GAO researchers, who added for this reason certain federal tax laws as well as some Medicare and Medicaid payments were established.
CMS was charged with assessing these uncompensated costs. However, the GAO argues "the agency’s use of Medicaid patient days as the basis for distributing Medicare UC payments to hospitals results in poor alignment of payments to hospital uncompensated care costs. "
“Everyone wants to preserve a strong safety net to help cover the costs for caring for the most vulnerable and uninsured,” Upton was quoted by Morning Consult, adding, “But this new report also raises important questions about ways in which [CMS] can recalibrate existing payments to achieve needed efficiencies to protect taxpayers."
The report concluded that CMS should base Medicare UC payments on hospital uncompensated care costs rather than the number of days hospitals spend treating Medicaid and Medicare beneficiaries in order to improve alignment.
In addition, the authors recommended Medicare should take into account payments that have already been made to hospitals under Medicaid when reimbursing for uncompensated care.