Safety-net hospitals provided $11 billion in uncompensated care and another $11.4 billion in under-reimbursed care in 2023, according to a Nov. 6 report from America’s Essential Hospitals.
Four things to know:
1. Of the $11 billion in uncompensated care performed at AEH’s 383 member hospitals in 2023, 70% was charity care for uninsured patients. Twenty-two percent was non-Medicare bad debt expenses and 8% was charity care for patients with insurance who could not afford their medical bills.
2. AEH said Medicaid and Medicare often undervalue the care provided at safety-net hospitals, resulting in shortfalls between what the programs pay and a hospital’s cost of care. Of the $11.4 billion in under-reimbursed care, 86% resulted from Medicaid shortfalls (after disproportionate share hospital payments), 10% from Medicare shortfalls (after DSH payments), 3% from Medicare bad debt, and 1% from state or local indigent care programs.
3. Without Medicaid DSH and other Medicaid supplemental payments, essential hospital operating margins would have been -12.4% in 2023. After DSH and other government appropriations, essential hospitals had aggregate margins of -1.6%.
4. “This report shines a light on the severe financial challenges facing essential hospitals, which will be dramatically increased in the coming years with the unprecedented Medicaid cuts in H.R. 1,” AEH President and CEO Jennifer DeCubellis said in a Nov. 6 news release.
Read the full report here.
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