Why growing worker productivity could be bad for hospitals' Medicare rates

Hospitals could face increased financial pressure from adjusted Medicare reimbursement rates under the ACA, reports The Wall Street Journal.

Here are five things to know.

1. The ACA helped roughly 20 million Americans gain insurance coverage. This means hospitals saw more insured patients who could cover medical expenses.

2. But the ACA also includes adjusted Medicare reimbursement rates. Medicare reimbursement rates are adjusted based on productivity, "or what a typical worker produces in a typical hour. That means that reimbursement payments fall as productivity in the broader economy grows," the report states.

3. The Congressional Budget Office estimates these adjustments will reduce annual reimbursement rate growth by an average of about 0.8 percent through 2025.

4. Due to these adjusted Medicare reimbursement rates, hospitals could end up losing a significant amount of revenue, WSJ notes. Various hospitals in recent years have already cited decreased Medicare reimbursement as a factor in their financial struggles.

5. Republicans have revived efforts to dismantle the ACA. Earlier this month, Republicans revealed their latest ACA repeal bill prior to the Sept. 30 budget reconciliation deadline. WSJ notes a new reimbursement formula could come into play if the ACA is repealed.

Read the full report here.

 

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