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Date Submitted: 03/26/2016 07:09 AM
The Financial Implications of Uncompensated Hospital Care
For the Uninsured in Texas
By:
Michael Williams PT
Texas Woman’s University
HCA 5103: Foundations of Health Services
Spring 2015
EXECUTIVE SUMMARY
The prospering future for Texas hospitals is most uncertain due to escalating uncompensated hospital care provided to uninsured patients. As the population rises in Texas, so does the population of the uninsured poor. Since EMTALA was signed into law in 1986, uninsured patients have primarily relied on “safety net” hospitals for their medical care.
Lack of Medicaid expansion by Texas implemented through the Affordable Care Act is causing significant budgetary problems for Texas hospitals. Without the expansion of Medicaid services in Texas, the bottom line is that Texas hospitals are going to continue suffering from a rapidly increasing expense to declining reimbursement ratio. Hospitals that operate in states where Medicaid expansion has not been enacted are the hardest hit with higher volumes of uncompensated hospital care.
This paper discusses financial implications related to rising levels of uncompensated hospital care as well as a decline in federal reimbursement from government programs that may eventually lead to disaster for “safety net” hospitals not well supported by a larger health system. “Safety net” hospitals are acutely dependent on DSH payments which aid in reimbursement of uncompensated hospital care provided to the uninsured. In addition to shrinking DSH payments annually, a reduction in Medicare reimbursement of hospital services provided to Medicare patients will greatly impact hospitals across the board.
Recent hospital employee layoffs and complete hospital closures have already begun for hospitals across the US including Texas. Hospitals may be forced to take desperate action in order to recoup part of the uncompensated hospital care provided to uninsured patients in order to just keep their doors open....