MedPac's Safety Net Funding Guidelines Rankle Stakeholders

America's Essential Hospitals says MedPAC's MSNI ignores the costs of uncompensated care, and care to Medicaid beneficiaries.

Safety net hospitals say the wording of the Medicare Payment Advisory Commission's otherwise well-intended recommendation to provide $2 billion in additional funding for them "could have the perverse effect of shifting resources away from hospitals that need support the most."

Beth Feldpush, chief lobbyist for America's Essential Hospitals, says MedPAC's Medicare safety net index (MSNI) put forward in the newly released March 2023 Report to Congress "fails to account for all the nation's safety net hospitals by overlooking uncompensated care and care provided to non-Medicare, low-income patients—especially Medicaid beneficiaries."

"Any practical definition of a safety net provider must consider the care of Medicaid and uninsured patients, yet the MSNI misses on both counts," Feldpush says.

As a result, Feldpush says the shortcomings "would shift resources away from large, teaching, and urban hospitals and those serving many uninsured patients and contradict Congress' intent to better account for uncompensated care in Medicare disproportionate share hospital (DSH) payments."

"The MSNI also would hinder work to improve care equity by undermining providers that care for people at greatest risk of structural inequities and health disparities, including many low-income Medicare beneficiaries," Feldpush says.

America's Essential Hospitals is calling for the government to develop a federal designation of safety net hospitals and to reject the MSNI as a part of that process, "as it would jeopardize access to care for marginalized patients and harm hospitals that operate on low margins and rely on public payers," Feldpush says.

"Further, policymaking for these hospitals should supplement, rather than redistribute, existing Medicare DSH funding, which reflects a congressionally sanctioned, well-established methodology."

For clinicians, MedPAC recommends targeted add-on payments of 15% to primary care clinicians and 5% to all other clinicians for physician fee schedule services provided to low-income Medicare beneficiaries.