Although hospitals are expected to face financial challenges in the year ahead, many healthcare companies are already struggling. According to data compiled by Bloomberg, healthcare bankruptcy filings have more than tripled in 2017. Healthcare bankruptcies are on the rise as filings across the broader economy have fallen since 2010, according to the report.
The challenges in the healthcare sector may hit rural hospitals the hardest due to the reduction in Disproportionate Share Hospital payments.
The ACA calls for annual ggregate reductions to DSH payments from fiscal year 2014 through fiscal year 2020. Subsequent legislation delayed the start of the reductions until fiscal year 2018, which began Oct. 1, and pushed the end date back to fiscal year 2025.
David Neier, a partner at Winston & Strawn, told Bloomberg the cuts to DSH payments may “single-handedly throw hospitals into immediate financial distress.”
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