WASHINGTON, D.C. — A new research brief finds proposed site-neutral payment proposals would significantly weaken hospitals’ ability to sustain essential care services, forcing them to make difficult decisions that could jeopardize patient access to 24/7 care and critical healthcare services.
America’s hospitals already face intense pressure from workforce challenges, rising costs for drugs and equipment, and increases in uncompensated care. According to the analysis, additional Medicare cuts through site-neutral policies would compound existing challenges, pushing many hospitals, particularly those serving rural and vulnerable communities, into severe financial distress, potentially forcing them to reduce services or close entirely.
The analysis, conducted by FTI Consulting, examines Medicare payment proposals modeled on recommendations from the Medicare Payment Advisory Commission. The report evaluates how expanding site-neutral Medicare cuts would affect hospital stability, critical service lines, and patient access to care.
Specifically, the analysis finds that expanded site-neutral Medicare cuts would reduce hospital care funding by $182 billion over ten years, placing nearly 1,200 hospitals at risk of financial distress (defined as having an operating margin below 0%). Rural areas would experience disproportionate consequences, threatening access to care in communities that often have no alternatives.
The analysis also highlights serious implications for access to critical service lines. Hospitals that provide emergency, maternity, and behavioral health services already face disproportionate strain. With the expansion of site-neutral Medicare cuts, more than one-third of hospitals offering these services would be at risk or at high risk of financial distress, exacerbating maternity and behavioral health deserts and weakening emergency response capacity.
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About the Coalition to Strengthen America’s Healthcare: The Coalition to Strengthen America’s Healthcare was formed to strengthen patients’ access to high-quality healthcare — 24/7/365. It is a community of more than 2 million grassroots advocates who recognize that hospitals and health systems are the heart of providing 24/7, life-saving healthcare for all Americans. We make it clear that Washington needs to strengthen and protect access to 24/7 patient care — not let special interests put patient care at risk. Learn more: strengthenhealthcare.org