While Medicare reimbursement to hospitals has always been too low, new data shows that Medicare payment levels hit record lows in 2022. Reimbursement data for 2023 is also expected to also be at or below the record low in 2022. According to AHA data collected from hospitals and health systems, Medicare paid just 82 cents for every dollar spent by hospitals caring for Medicare patients in 2022 – the most recent data available. This added up to an underpayment of $99 billion.
An independent organization called the Medicare Payment Advisory Commission (MedPAC), advises Congress on Medicare policies. It has projected that these low Medicare margins will continue into 2025. Recognizing the financial situations hospitals face, the Commission in January of this year voted to recommend to Congress a record high payment update at the current law rate plus 1.5% for hospitals in 2025.
With the bulge of baby boomers now on Medicare, the stress to the program has never been greater. There’s no time like now to ensure that all billing to payers is correct, compliant and paid as soon as possible.