Deductions and Uncompensated Care
With financial pressures requiring greater returns on revenue cycle initiatives, 2010-13 trends on deductions from revenue and other data points indicate how challenging it will be to actually achieve those greater returns. Median deductions first passed the 50 percent threshold in 2001. Financial executives were astonished to see they were to be paid less than half the billed amount for the services performed. Yet analysis of data on 600 non-federal acute care hospitals discloses that median deductions (for hospitals in the 50th percentile) reached 64 percent of charges as of the end of 2013.
A comparison of the data for the 50th percentile group of hospital, where the data were divided into five defined and one “all hospitals” comparative group, produces a noteworthy finding: Although major teaching hospitals have generally been perceived as bearing the greatest burden for uncompensated care—and, indeed, the data document the significant amount of unreimbursed care provided by teaching organizations—the largest burden resides with large community hospitals.
The data for this analysis was developed by Truven Health Analytics. For additional information, please contact Phil Gaughan or David Koepke.
Publication Date: Monday, February 03, 2014