Changing how Medicare and Medicaid pay healthcare providers for supplemental services—such as uncompensated hospital care—could help address inequities in the nation’s health system.
Data show that in 2020, $82.4 billion in Medicare and Medicaid supplemental payments were made to healthcare providers. Redirecting a portion of these funds could expand coverage and improve outcomes.
Of the $82.4 billion in supplemental payments made in 2020, Medicaid accounted for $71.7 billion and Medicare accounted for $10.7 billion.
Researchers propose two approaches to repurposing these payments to better address inequities within the health system.
The first approach would use a portion of existing supplemental payments to expand health insurance coverage to the uninsured.
The second would target existing supplemental payments in a more equitable way, prioritizing hospitals in need across the country.
Supplemental payments are important to healthcare providers, particularly safety net hospitals. Changing the current allocation of supplemental payments would be a significant policy change, but this analysis highlights that a clearer strategy is needed.
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