Manatt Partner Speaks to Modern Healthcare on Hospital Subsidy Cuts

Manatt Partner Speaks to Modern Healthcare on Hospital Subsidy Cuts

"Safety-Net Hospital Revenue in Peril Under Health Reform"
Modern Healthcare

July 19, 2012 - Manatt's Melinda Dutton, a partner in the firm's Healthcare Division, spoke to Modern Healthcare about the subsidy cuts that hospitals will experience under the health reform law.

As reported by Modern Healthcare, safety-net hospitals, which provide health services to low-income and uninsured populations, could lose federal subsidies under the health reform law. The law reduces subsidies by $36 billion over 10 years to offset hospital losses on uninsured patients. A projected 34 million people will gain subsidized insurance through Medicaid, and as more patients gain insurance, hospitals will see fewer direct subsidies.

However, many patients may remain uninsured in the states that have said they will not participate in Medicaid expansion. The Urban Institute estimates that expansion would cover 11.5 million uninsured adults who live below the poverty level and are ineligible for subsidies available under health reform.

Dutton told the publication that federal health officials will decide how to distribute what's left of some hospital subsidies, known as Medicaid disproportionate share payments, and could take into consideration state Medicaid expansion policies.

Guidance is expected in 2013, she added.

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