Federal cuts to hospitals will top $218B by 2028, called 'troubling trend'

By 2028, federal payment cuts to hospitals since 2010 will total $218.2 billion, according to a report from Dobson Davanzo & Associates commissioned by the Federation of American Hospitals and the American Hospital Association.

"Continued cuts of this magnitude represent a troubling trend for hospitals and health systems as many struggle with declining reimbursements for services provided in and out of the hospital,” said Rick Pollack, president and CEO of the AHA. "Additional reductions will create challenging and potentially unsustainable financial circumstances that could adversely impact patients’ access to care and the ability of hospitals to provide services."

The study investigated how new healthcare legislation and regulatory changes have changed hospital funding over time. The study found the three biggest contributors to the payment reductions were $79.3 billion from changes with MS-DRG documentation and coding; $73.1 billion due to federal budget sequestration; and $25.9 billion from lower Medicaid disproportionate share hospital payments.

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