GAO Releases Report on Uncompensated Care

A new report from the Government Accountability Office (GAO) finds that federal action is needed to better
align payments to hospitals to more accurately allocate uncompensated care costs and reduce the potential for overpayments. The report evaluates federal support for health care services provided by U.S. hospitals to uninsured and low-income individuals. The GAO found that hospitals were covered for almost $50 billion in uncompensated services in fiscal years (FY) 2013 and 2014, with three-quarters of these payments made by state Medicaid programs. The remainder of the uncompensated care payments was made by the federal Medicare program. The report explains that there is a misalignment with the Medicare Uncompensated Care payment, which could potentially result in greater payments to hospitals whose provision of uncompensated care is declining. Additionally, the agency notes that the Centers for Medicare
and Medicaid Services (CMS) does not adjust the Medicare Uncompensated Care payment for the Medicaid payments hospitals already receive to offset their uncompensated care costs. The U.S. Department of Health and Human Services (HHS) has concurred with the GAO’s findings and recommendations.

Conservatives Request Strategy Session on CR

According to a July 13 letter obtained by CQ last week, members of the conservative House Freedom Caucus and the Republican Study Committee have written to their party leadership requesting a special House Republican conference meeting to discuss plans for passing a continuing resolution (CR) before the end of fiscal year (FY) 2016. A stopgap spending measure needs to be passed by September 30 in order to avoid a government shutdown. Members of the Freedom Caucus have been particularly outspoken in their support for a six-month continuing resolution that would prevent an omnibus-spending package from being negotiated during a lame duck session. Speaker of the House Paul Ryan (R-Wis.) and Senate Majority Leader Mitch McConnell (R-Ky.) have not expressed a preference for the duration of a FY 2017 CR, and it is unknown if and when a meeting on the subject will be held.

Readmissions Penalties Hit a New High

The Medicare program’s penalties on hospitals for their readmission rates have reached an all time high, according to new records released last week. The penalties now account for more than a half a billion dollars in payments withheld from more than half of the nation’s hospitals. While the number of hospitals being punished – 2,597 – remains relatively stable compared to the previous year, the average penalty will increase by a fifth. The penalties are expected to total $528 million, an increase of $108 million over last year, because of changes in how readmissions are measured. The penalties are based on the re-hospitalization rate for patients with a number of common conditions: heart attacks, heart failure,
pneumonia, chronic lung disease, hip and knee replacements, and coronary artery bypass graft surgery

Upcoming Congressional Meetings and Hearings

House Veterans’ Affairs Subcommittee on Health Field Hearing titled “Technology and Treatment: Telemedicine in the VA Healthcare System;” 9:00 a.m. (local time), Camarillo Public Library, 4101 E Las Posas Road, Camarillo, CA 93010; August 9

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