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Report: U.S. Hospitals Face Diminished Reserves, Mounting Reimbursement Challenges

Payment denials by Medicare Advantage plans jumped 56% for the median health system between January 2022 and June 2023, contributing to a 28% decline in median cash reserves, according to the latest analysis of data from over 1,300 hospitals and health systems by Syntellis Performance Solutions and the AHA. At the same time, maintenance expenses jumped 90% due to facility needs deferred during the COVID-19 pandemic, utility expenses rose 35%, professional fee expenses rose 33%, drug expenses rose 30%, and total labor expense rose 24% due to long-running labor shortages and other workforce challenges, the analysis found.
“The latest data highlight the persistent challenges that hospitals and health systems face in having the financial resources needed to maintain access to care for their patients, and to be prepared for the next crisis that may arise at any time,” the report notes. “…Such challenges will only worsen unless regulatory agencies conduct greater oversight of problematic payer practices and address other administrative hurdles that further strain hospital resources, deplete cash reserves, and inhibit medically necessary care.”