$715 billion in healthcare cuts considered

The House Energy and Commerce Committee is considering a reconciliation bill this week that includes $715 billion in healthcare saving over 10 years.

Key Medicaid provisions for health systems and hospitals include:

• Freezing provider taxes; bars new ones
• Limiting new state-directed payments to Medicare rates
• Reducing retroactive coverage from three months to one month
• Establishing new requirements for healthcare-related tax waivers
• Requiring HHS to certify section 1115 demonstration projects don’t increase spending
• Delaying for two years $8 billion in Medicid DSH cuts
• Suspending three Biden Medicaid rules for 10 years
• Requiring more state enrollee and provider verification

Bad debt, charity up 32% since 2022

Uncompensated care costs sharply accelerated in recent years, but they were mostly offset by increasing hospital incomes, according to recent data.

Together, bad debt and charity care per calendar day increased 32% year-to-date (YTD) 2025 compared to YTD 2022, according to new Kaufman Hall data.

The uncompensated care costs came amid a 31% increase in gross operating revenue per calendar day over the same time period.

However, bad debt and charity care as a percent of gross revenue also increased 2% over that period — a continuing long-term trend.

Factors driving that trend include:

• Increased payer denials
• Increasing hospital patient acuity

Uncompensated surge

Large hospitals (200 or more beds) have seen big increases in their bad debt and charity care costs since the lull of the COVID-19 pandemic.

Source: Strata Decision Technology data

R.I. price controls cut hospital revenue by $159 million annually

Amid a growing number of state initiatives to set different hospital price controls, a long-running Rhode Island program was found to produce big revenue cuts.

According to a new study, a Rhode Island program capping hospital charges to fully insured plans for 2012 to 2022 resulted in:

• $159 million average annual hospital revenue cut
• 9.1% average cut in hospital prices versus those in comparison states

The Rhode Island program, which the legislature considered repealing last year, may be bolstered by finding that much of the hospital price cut was passed along to commercially insured plans and enrollees.

Although the study did not track the size of the hospital revenue cut by every year, an author said its growth over the early years indicated it likely surpassed $159 million in the years after 2022.

Rhode Island hospital price controls

Rhode Island hospitals’ revenue was cut an annual average of $159 million over the last six years that were studied of the state’s price control program.

Source: Rhode Island’s Affordability Standards Led To Hospital Price Reductions And Lower Insurance Premiums, Ryan, A.M., et al., Health Affairs, May, 2025

NUMBER TO KNOW

From 2019 to 2023, 75% of healthcare providers increased their digital and IT budgets by an average of 18.3%, with one in five citing increases of more than 30%, according to an HFMA executive survey. Read more.

Crucial Dates

LEGISLATIVE

May 14: Senate HELP Committee HHS budget hearing

May 14: House Appropriations Labor, Health and Human Services, Education, and Related Agencies Subcommittee HHS budget hearing

REGULATORY

June 15: Requirement to remove healthcare bills from credit reports effective (postponed from March 15)

June: Initial price offers due from CMS for drugs subject to Medicare price negotiations

INDUSTRY

June 22-25: HFMA Annual Conference

July 20-22: AHA Leadership Summit