KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Low Medicare Reimbursement Rates Hurt Hospitals in Iowa And California

Low Medicare reimbursement rates are not keeping up with costs at hospitals in Iowa and California while a grant helps boost Medicare enrollment in Missouri.

Television Station KHQA 7 reports on how Iowa hospitals are losing millions of dollars a year because of low payments from the state and federal government. "For years Medicare pays 14 percent less than what it actually costs for hospitals to provide the care to patients. Medicaid payments are even lower and many times are late in coming," KHQA reports. The station reports that "while Iowa ranks third lowest in the nation for Medicare reimbursements it's not hurting patient care." A recent Commonwealth Fund Study that found that "Iowa hospitals are number two in the nation for quality of patient care, patient access and affordability." Still, hospitals find it hard to recruit physicians and health care professionals because of low reimbursement rates, a trend that may make it more difficult to maintain high health quality standards in the future (Shriver, 6/2).

The Times-Standard in Northern California also reported on cost issues and wage freezes at St. Joseph Health System in Humboldt County and across California that were caused in part by low reimbursement rates for Medicare and Medi-Cal patients. "As of June 2008, more than half the state's hospitals reported that they were operating at a loss, according to a California Hospital Association survey. And, due to the current recession, things have likely just gotten worse," The Times-Standard reports. "California's reimbursement rate for Medicare and Medi-Cal patients falls far below the costs hospitals incur providing services to those patients, leaving hospitals to take the losses," the paper notes. It adds that "hospitals only receive 78 cents in state reimbursements for every dollar they spend treating Medicare and Medi-Cal patients. With the state's unemployment rate hanging around 11 percent, hospitals are likely to see more and more Medicare and Medi-Cal patients, and consequently incur more losses" (Greenson, 6/3).

Missouri, though, received funding that will help boast its' Medicare enrollment. The News-Leader reports that "nearly $430,608 of new funding is being distributed to the Missouri State Health Insurance Assistance Program, the State Agency on Aging and Area Agencies on Aging to help the most vulnerable Medicare beneficiaries in Missouri apply for Medicare benefits." It also noted that "the grant is part of the $30 million being awarded nationally from the Medicare Improvements for Patients and Providers Act of 2008" (6/3).

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