Rhode Island’s hospital industry is troubled. The largest system, Lifespan is losing a key executive and just announced a major financial loss. When the company, which is also the state’s largest private employer, blamed its losses on Medicare cuts, the Boston Globe (R.I. Hospital president to leave as Lifespan announces losses, offers early retirements) called on David Williams for insight.
David E. Williams, president of Health Business Group, a Boston consulting firm, said he was struck by Lifespan’s remarks that its operating losses were due, in part, to “a dramatic and unexpected reduction in Medicare rates.”
Last month, about 600 hospitals filed lawsuits against the US Department of Health and Human Services, claiming they’ve been shortchanged on Medicare payments. Inpatient hospital reimbursements were reduced 0.7 percent, an adjustment that’s been in place since 2011 and is extended by Congress to recover overpayments.
The hospitals are suing over reductions in 2018 and 2019, which is estimated at about $200,000 per hospital, per year.
“If that’s what [Lifespan] is referring to, it was certainly unwelcome by providers, but whether you can say it was unexpected or dramatic, I wouldn’t agree with it,” Williams said.