fah hospital policy blog

Perspectives on health policy affecting America’s hospitals and the patients we serve.

Senator Peters Urges Budget Committee Leadership to Protect Seniors & Hospitals

March 19, 2015 | FAH Hospital Policy Blog Team

Category: Backstop, Medicare

This week, Senator Gary Peters (D-MI) wrote to Senate Budget Committee leadership to express several concerns about proposed Medicare payment cuts in the Administration’s FY2016 HHS budget request. The letter specifically expresses strong concerns related to a proposed drastic cut to a critical program known as Medicare bad debt, which hospitals depend upon to continue providing high-quality care for Medicare beneficiaries.

Senator Gary Peters joins Senators Roy Blunt and Marco Rubio and many others in urging policy leaders to preserve the current Medicare bad debt payment rate to protect seniors who would be hurt by cuts to this program.

Medicare bad debt payments have been part of Medicare since the program’s inception in 1966.  Congress created this “backstop” to protect access to care for low-income seniors who struggle to meet their cost-sharing obligations, which are determined by the government.  In recent years, the Medicare backstop has been cut—taking what was 100% reimbursement for uncompensated Medicare cost-sharing, and cutting it substantially—to 65%.

In this year’s budget, the President proposes cutting Medicare bad debt payments to hospitals even more substantially to just 25%.

In his letter, Senator Peters explains why maintaining the backstop at its current level is so critical to seniors and hospitals in Michigan:

“Unlike private health insurance providers, hospitals cannot negotiate with Medicare to cover the costs of their patients. Michigan hospitals assume approximately $200 million dollar in uncompensated care for seniors annually…The cuts will hurt hospitals that service a high percentage of low-income seniors in traditionally underrepresented communities.”

By defending the Medicare backstop, Senator Peters is standing up for low-income seniors in Michigan and across the country. The FAH thanks him for his efforts to protect seniors and the hospitals that care for them 24/7/365.