How default can affect Medicare, Medicaid payments

Hospitals and health systems are hoping to solve the problem of the federal government’s debt ceiling. Failure to reach an agreement can have a serious impact on supplier payments.

Republicans and Democrats continue to haggle over a deal to lift the national debt limit by $31.4 trillion and keep the United States from defaulting on its deals, likely early in the day. June.

Alice Burns, deputy director of the Medicaid and Uninsured Programs at the KFF, said it’s unclear what programs the federal government will prioritize if lawmakers fail to reach a resolution before the money runs out. .

Depending on what the government decides, providers could face delays or cuts in Medicare and Medicaid reimbursements.

About 70 percent of Medicaid spending comes from the federal government. Without funding, states would have to decide whether to receive the difference and whether all providers would be equally affected.

Once a choice is made, providers can feel the impact within days, said Richard Gundling, senior vice president of the Association for Health Financial Management.

Gundling said the loss of funds would damage the health system’s balance sheet, forcing providers to stockpile cash or negotiate other options with lenders. Some providers may cut back on elective procedures and other services.

Rural establishments will be hardest hit by delayed or discontinued payments, due to greater financial vulnerability.

“This is going to be a huge problem,” Gundling said.

Republicans are pushing tightening job requirements to qualify for federal aid in debt ceiling negotiations, among other conditions. On Tuesday, House Speaker Kevin McCarthy (R-Calif.) said no deal had been signed, following Monday’s meeting between McCarthy and President Joe Biden. The Treasury Department reportedly asked federal agencies if they could delay upcoming payments.

David Francis, executive director of BDO’s Center for Healthcare Innovation and Excellence, said systems should dedicate appropriate resources to their receivables departments to accelerate claim collection. claim against financial challenges, in addition to paying attention to revenue and expenses. Suppliers could be forced to withdraw capital plans or cut jobs, he said.

Besides Medicare and Medicaid, government subsidies for the Affordable Care Act programs could also dry up, leading to increases in individual premiums. Care provided through Department of Veterans Affairs clinics may also be affected.

Dr. Richard Isaacs, Outgoing CEO of Kaiser’s The Permanente Medical Group, said his main concern is what default means for patients’ access to care. Patients facing less coverage for services are more likely to delay seeking care and providers may become more reluctant to accept individuals using the plans. government payments.

Due to limited options, patients will increasingly turn to urgent care services, an expensive option for both parties, says Isaacs.

“I think, in the short term, you get through, and then you have a secondary impact because the revenue will need to come from somewhere,” Isaacs said.


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