The American Hospital Association has urged lawmakers to eliminate Medicaid disproportionate share hospital reductions for two years and reject proposals to expand site-neutral payment cuts as well as policies that would increase regulatory burdens on hospitals and health systems.
In a Jan. 10 letter addressed to Senate and House leaders, the AHA argued that it is "unconscionable" to proceed with such pay cuts at a time when many hospitals and health systems continue to battle a variety of financial challenges.
"This is largely due to the fact that Medicare already significantly underpays hospitals for the cost of caring for patients," AHA President and CEO Richard Pollack wrote.
New data from the AHA found that Medicare payments to hospitals fell to a record low in 2022. Medicare underpayments to hospitals hit $99.2 billion in 2022 — almost two and a half times the amount in 2012.
"As a result, two-thirds of all hospitals reported negative Medicare margins in 2022. Enacting these site-neutral cuts would pave the way for commercial insurers to implement additional site-neutral cuts in the private market," Mr. Pollack said. "We urge you not to prioritize commercial insurers' interests at the expense of patients in your communities."