Children’s hospitals lose money on kids with Medicaid

By Kathryn Doyle

(Reuters Health) – Children’s hospitals lose more money than other facilities treating children covered by Medicaid and may be under pressure in 2018 when federal payments compensating for this loss are reduced, according to a new study. Medicaid typically pays less than what it costs a hospital to provide service, the authors write, and U.S. hospitals lost $14.1 billion in 2014 from Medicaid underpayment. Federal Disproportionate Share Hospital payments (DSH) are designed to compensate hospitals that cover uninsured or Medicaid insured patients, but as the Affordable Care Act reduces the number of uninsured people in the U.S., DSH payments are scheduled to be reduced annually by $2 billion in 2018.More than a third of U.S. children are insured by Medicaid, according to the authors of the study.“It’s a bit surprising how much money children’s hospitals lose from caring for children with Medicaid,” said lead …
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