Medicare Underpaid Hospitals by $53.9B in 2017

Underpaid by $2.2 billion In Wisconsin alone

January 08, 2019

The American Hospital Association released its annual survey of Hospitals for 2017, the most recent year of available data. Among its findings were that Medicare underpaid hospitals by nearly $54 billion in 2017, accounting for the difference between what Medicare paid and what it cost hospitals to provide Medicare services. In Wisconsin, Medicare underpayments increased from $1.77 billion in 2016 to more than $2.15 billion in 2017, with another $215 million in uncollected bad debt. This is not surprising as aging demographics in our state mean more Wisconsinites are becoming eligible for Medicare and accessing Medicare services.

Overall, both Medicare and Medicaid paid hospitals about 87 cents on the dollar nationally. Wisconsin’s Medicare and Medicaid reimbursements lag well behind national averages, paying roughly 75 cents on the dollar for Medicare and 65 cents on the dollar for Medicaid. This failure of the government to pay the full cost of care results in a hidden health care tax on everyone else; it creates a cost shift in the form of higher health insurance premiums for businesses and individuals, who make up the difference. 

WHA-led initiatives like the disproportionate share hospital (DSH) Medicaid program have helped improve these deficits, and despite these challenges, Wisconsin continues to have some of the highest quality care in the nation. WHA will continue to advocate aggressively on the state and federal side to inform lawmakers on what they can do to reduce the hidden health care tax and help Wisconsin maintain its well-deserved reputation for delivering high-value, high-quality health care. 

This story originally appeared in the January 08, 2019 edition of WHA Newsletter