“Let’s Not Point Fingers:” Feds Cut $253 Billion from Hospital Payments

The recent study was commissioned by the American Hospital Association and the Federation of American Hospitals.

A report released last week found that the federal government has reduced Medicare and Medicaid payments to hospitals by nearly $253 billion, through 12 different legislative actions since 2010.

$253 billion.  

Two quick notes about the calculation of this sum:

  1. First, while the reductions reflect legislation and regulations that have been passed since 2010, the analysis did not include any reductions – or, perhaps increases – that may have been a result of the Patient Protection and Affordable Care Act (PPACA) itself.
  2. Second, the analysis includes reductions projected out 10 years from now, through to 2029. So the report is projecting that because of legislation passed in the last nine years, in 2029 we will see a total of $253 billion reduction in hospital payments over the prior 19 years.

A listener of Monday Monitors wanted to know what administration passed the majority of these cuts. Although it is not included the report, you can track which administration was in place, according to the dates of the laws listed in the report:  

  • Under President Obama, for the six years after 2010, there were about $127 billion in reductions.
  • Under President Trump, after three years of his presidency, there were about $34 billion in reductions.
  • The remaining reductions occurred through legislation on Medicaid disproportionate share hospital payments, and multiple regulatory moves that didn’t have dates affixed to them in the report.

Hold that thought, though. Most of these cuts were made through legislation, which Congress had to pass. Again, this is not in the report, but:

  • When Obama had a Congress that was Democrat-dominated – that is, 2010, for the purposes of this report – there didn’t appear to be any reductions, except for those that may have been made via the aforementioned PPACA which were not counted in this report.
  • When Congress became split under Obama for four years, with Republicans taking the Senate and Democrats in the House, about $80 billion in reductions were passed.
  • When Republicans had both houses for four years, in the last few years of Obama administration and the first two years of Trump’s term, about $60 billion in reductions were passed.
  • Finally, for the past year under Trump, with Democrats in control of the House and Republicans in the Senate, about $15 billion in reductions have been put in place.

So, given the different mixes in Congress over the past nine years, I don’t know how quick I would be to point fingers at any one party for these reductions.

How are hospitals making up the shortfall in Medicare reimbursement? At least one study says that employee health plans may be picking up some of the slack. A study released earlier this year found that between 2015 and 2017, at least in some states, hospital healthcare cost for employee health plans rose 5 percent.

Last week on Monday Monitors, there were a number of reports that touched on President Trump’s executive order on Medicare in early October. I’ll leave you with two observations that others have made about that executive order, with respect to Medicare reimbursement policies:

  1. First, along with boosting the Medicare Advantage program, the president called for a report on how Medicare fee-for-service can better align with commercial insurance prices. This seems to indicate some intent to increase reimbursement from Medicare.
  2. Second, the main political intent of the executive order was to fight this idea of Medicare for All. Originally, you may remember, the executive order had the action-movie tagline title of “Protecting Medicare from Socialist Destruction” (not kidding.) But won’t boosting Medicare Advantage and talk of raising Medicare reimbursement be a great advertisement for Medicare – and, thus, increase the attractiveness of Medicare for All?

Food for thought.

Facebook
Twitter
LinkedIn

Matthew Albright

Matthew Albright is the chief legislative affairs officer at Zelis Healthcare. Previously, Albright was senior manager at CAQH CORE, and earlier, he was the acting deputy director of the Office of E-Health and Services for the Centers for Medicare & Medicaid Services.

Related Stories

Leave a Reply

Please log in to your account to comment on this article.

Featured Webcasts

2026 IPPS Masterclass 3: Master MS-DRG Shifts and NTAPs

2026 IPPS Masterclass Day 3: MS-DRG Shifts and NTAPs

This third session in our 2026 IPPS Masterclass will feature a review of FY26 changes to the MS-DRG methodology and new technology add-on payments (NTAPs), presented by nationally recognized ICD-10 coding expert Christine Geiger, MA, RHIA, CCS, CRC, with bonus insights and analysis from Dr. James Kennedy.

August 14, 2025
2026 IPPS Masterclass Day 2: Master ICD-10-PCS Changes

2026 IPPS Masterclass Day 2: Master ICD-10-PCS Changes

This second session in our 2026 IPPS Masterclass will feature a review the FY26 changes to ICD-10-PCS codes. This information will be presented by nationally recognized ICD-10 coding expert Christine Geiger, MA, RHIA, CCS, CRC, with bonus insights and analysis from Dr. James Kennedy.

August 13, 2025
2026 IPPS Masterclass 1: Master ICD-10-CM Changes

2026 IPPS Masterclass Day 1: Master ICD-10-CM Changes

This first session in our 2026 IPPS Masterclass will feature an in-depth explanation of FY26 changes to ICD-10-CM codes and guidelines, CCs/MCCs, and revisions to the MCE, presented by presented by nationally recognized ICD-10 coding expert Christine Geiger, MA, RHIA, CCS, CRC, with bonus insights and analysis from Dr. James Kennedy.

August 12, 2025

Trending News

Featured Webcasts

The Two-Midnight Rule: New Challenges, Proven Strategies

The Two-Midnight Rule: New Challenges, Proven Strategies

RACmonitor is proud to welcome back Dr. Ronald Hirsch, one of his most requested webcasts. In this highly anticipated session, Dr. Hirsch will break down the complex Two Midnight Rule Medicare regulations, translating them into clear, actionable guidance. He’ll walk you through the basics of the rule, offer expert interpretation, and apply the rule to real-world clinical scenarios—so you leave with greater clarity, confidence, and the tools to ensure compliance.

June 19, 2025
Open Door Forum Webcast Series

Open Door Forum Webcast Series

Bring your questions and join the conversation during this open forum series, live every Wednesday at 10 a.m. EST from June 11–July 30. Hosted by Chuck Buck, these fast-paced 30-minute sessions connect you directly with top healthcare experts tackling today’s most urgent compliance and policy issues.

June 11, 2025
Open Door Forum: The Changing Face of Addiction: Coding, Compliance & Care

Open Door Forum: The Changing Face of Addiction: Coding, Compliance & Care

Substance abuse is everywhere. It’s a complicated diagnosis with wide-ranging implications well beyond acute care. The face of addiction continues to change so it’s important to remember not just the addict but the spectrum of extended victims and the other social determinants and legal ramifications. Join John K. Hall, MD, JD, MBA, FCLM, FRCPC, for a critical Q&A on navigating substance abuse in 2025.  Register today and be a part of the conversation!

July 16, 2025

Trending News

Happy National Doctor’s Day! Learn how to get a complimentary webcast on ‘Decoding Social Admissions’ as a token of our heartfelt appreciation! Click here to learn more →

CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 2 with code CYBER24