April 17, 2015 | FAH Hospital Policy Blog Team
In a recent letter sent to the HHS Secretary, Senator Michael Bennet (D-CO) urges the Administration to reject a proposal that would harm low-income seniors by cutting Medicare bad debt payments to hospitals. .
This year, the Administration introduced a budget proposal for fiscal year 2016 that recommends drastic cuts to this critical Medicare provision, reducing these payments—currently at 65% reimbursement—over three years to just 25%.
Since its inception, Medicare has included bad debt payments as a backstop for its built-in cost-sharing obligations. This backstop protects Medicare beneficiaries who cannot meet their obligations – often low-income seniors – as well as providers who serve them.
Senator Bennet describes in detail the importance of Medicare bad debt payments to the state of Colorado:
“In Colorado, our providers have a long tradition of providing medical care to patients regardless of their ability to pay. In 2013, through a combination of charity care and bad debts, our hospitals provided approximately $250 million in uncompensated care. While providers in the state have fought to keep access to care open to all Coloradans, they can only do so when their reimbursement sources remain reliable. There is significant need for reimbursement of bad debt in Colorado.”
Medicare bad debt payments were intended to support vulnerable American seniors so they never would be afraid to seek the critical care they need. These resources are important to protect Colorado seniors’ access to care. This is why the FAH applauds Senator Bennet for his strong leadership and for standing up for Colorado’s seniors.