Government Healthcare Policy, Business and Technology

'Safety Net' Hospitals Face Federal Budget Cuts

Stateline: A double whammy of federal budget cuts might force many hospitals, particularly those that serve poor or rural communities, to scale back services or even shut their doors.

The $3.6 billion in cuts this year — $2 billion from a program that sends federal dollars to hospitals that serve a high percentage of Medicaid or uninsured patients, and $1.6 billion from a drug discount program — will have the greatest effect on so-called safety net hospitals that provide medical care for all comers, no matter their ability to pay.

The cuts are in addition to other losses of federal funds as a result of Congress’ failure to reauthorize spending in 2018 on other programs affecting many hospitals, including $1.5 billion to support community hospitals, a combined $370 million for the National Health Service Corps and Teaching Health Centers, both of which support rural hospitals, and $3 billion for the “Medicare extenders” program, which provides additional funding for isolated, low-volume hospitals and other rural hospitals.

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