Finance Policy Issues

Healthcare Reimbursement and Financing

Hospital and health system financing and reimbursement is complex and affects access to care in communities across Michigan. The MHA works on behalf of its members to achieve fair and adequate healthcare funding, and also helps hospitals communicate financial issues to the communities they serve.

Federal and State Hospital Finance Issues

The MHA monitors and engages with federal and state agencies that develop financing rules that direct hospital payments. These include payments for inpatient and outpatient services, value-based payments and fee-for-service payments. The MHA provides comments on key policy issues that impact the entire membership and/or significant subsets of the Michigan hospital community. MHA comments are shared with the membership via Monday Report and direct email communications to assist members in developing their own comments to governmental agencies.

Legislation signed by President Biden in December 2021 included several provisions that impact various Medicare payment policies including:

  • Eliminating the 2% Medicare sequester cuts from Jan. 1 – March 31, 2022, and reducing the cut to 1% for April 1 – June 30, 2022
  • Halting the 4% statutory Pay-As-You-Go (PAYGO) sequester for 2022 and adding it to the “2023 scorecard”.

Without further action by Congress, Michigan hospitals will suffer the lost revenues shown in this graphic. The MHA, along with the American Hospital Association, continues to advocate for action by March 11 to prevent these reductions from taking effect. Absent Congressional action, the full 2% Medicare sequestration reduction takes effect July 1, 2022.

For more information about this financial information and Medicare payment policy, please contact MHA senior director, Health Finance, Vickie Kunz with questions.

For more information, contact us.