The Effects of Changes in Hospital reimbursements
Institutional Affiliations
Healthcare is essential. The business of healthcare will never cease to exist in the United States due to many varying factors such as lifestyles, predisposed diseases, genetics, etc. The health care system has been changing over time, and we must understand how this change affects us all. One of the areas that this change has deeply impacted is healthcare reimbursement. It is also referred to as healthcare reimbursement arrangements. Healthcare reimbursement is the payment that a patient makes after receiving medical services. There are two significant sources of healthcare reimbursement: private health insurers and government agencies. The federal government does a considerable portion of healthcare reimbursement through agencies such as Medicare and Medicaid. As of 2019, 58 million people had enrolled for Medicare, while 64 million individuals had enrolled for Medicaid (?U.S. Health Care Coverage and Spending,? 2021).
How health reimbursement works is that once a provider offers medical services to a patient, they bill the party responsible for covering the medical costs. The provider bills the party based on a prior agreement which dictates the terms and rates. For example, the rates for patients who use Medicare are determined using a common procedural terminology code (CPT). Private insurers negotiate their rates.
In recent years through Centres for Medicare & Medicaid Services, Congress has sought to achieve budget neutrality in the healthcare sector. The result has reduced the amount allocated as healthcare reimbursement to healthcare facilities and providers for medical services offered (Fifer, 2016). The Budget Control Act of 2011 set in motion budget cuts in the healthcare sector. For nine-years, Medicare payment would be subjected to 2% annual cuts that would cut more than a trillion dollars in those nine years (Hackett, 2021). Research indicates that by 2029 federal health reimbursement will have reduced by $252.6 since 2010 (?New Report Shows Cumulative Hospital Cuts top $252 Billion,? 2019). The reduction is attributed to 11 legislative acts enacted by the Centres for Medicare & Medicaid Services. This study aims to establish how this reduction is affecting the healthcare system.
Impact of Declining Health Reimbursements on Patients
Delivery of health care services is quite expensive. The “per capita spending on health care is estimated to be 50 to 200 percent greater in the United States than in any other economically developed country” (Burke & Ryan, 2014). Health reimbursements from government agencies such as Medicaid and Medicare play a great role in the

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