Hatch, Upton react to GAO report on misaligned payments for uncompensated hospital costs

U.S. Sen. Orrin Hatch (R-UT) and U.S. Rep. Fred Upton (R-MI) highlighted a report on Monday that found misalignment in federal support to hospitals for uncompensated medical costs for uninsured and other low-income individuals.

More needs to be done to align Medicare and Medicaid payments to hospitals to address uncompensated costs and the potential for overpayments, according to a Government Accountability Office (GAO) report that was requested by Hatch and Upton.

“Everyone wants to preserve a strong safety net to help cover the costs for caring for the most vulnerable and uninsured,” Upton, the chairman of the House Energy and Commerce Committee, said. “The government watchdog report helpfully maps out how the Medicare and Medicaid programs pay for uncompensated costs that hospitals incur in providing care for all Americans. But this new report also raises important questions about ways in which CMS can recalibrate existing payments to achieve needed efficiencies to protect taxpayers.”

The report noted misalignment in the Medicare Uncompensated Care (UC) payment, which is mostly based on the number of Medicaid patients that are treated at a hospital rather than actual uncompensated costs. The misalignment can result in overpayments to hospitals when uncompensated care is declining.

“Our nation’s hospital systems devotedly serve all of our citizens regardless of ability to pay, and ensuring local hospitals are covered for uncompensated costs helps prevent those costs from being passed on to other patients in those communities,” Hatch, the chairman of the Senate Finance Committee, said. “To better serve and protect taxpayers from potential wasteful spending, I am hopeful CMS heeds the advice of Congress’s non-partisan oversight agency and takes the appropriate steps to ensure it is adequately coordinating and aligning payments for our local health care providers.”

The GAO report recommends reforms to the Medicare UC program to address misaligned payments and costs.