AHA data shows Medicare, Medicaid payments off true cost by $76 billion in 2019

February 2, 2021

According to recent data from the American Hospital Association (AHA), hospitals received 87 cents for every dollar they spent caring for Medicare patients and 90 cents for every dollar on Medicaid patients in 2019.

In total, the Medicare and Medicaid shortfall reached $75.8 billion right before the COVID-19 pandemic hit the United States in the first quarter of 2020, the hospital group reported using data from its Annual Survey of Hospitals.

AHA collects aggregate data on hospital payments and costs associated with care delivery for Medicare and Medicaid patients each year. The data shows how much lower hospital payments from the government payers are compared to the actual costs of care for treating beneficiaries of the programs, including the amount hospitals pay for personnel, technology, and other goods and services required to deliver care. The data does not include managed care plans.

However, the amount isn’t far off from what has been calculated in recent years. In 2017, Medicare and Medicaid underpaid hospitals by a total of $76.8 billion, which included a Medicare shortfall of $53.9 billion and a Medicaid shortfall of $22.9 billion, the AHA reported last year.

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