NCHA Statement on Treasurer’s Hospital Medicare Report
Cary, NC – Oct. 25, 2022 — The latest report commissioned by Treasurer Folwell continues a pattern of reports that have used misinformation and half-truths and that make inaccurate conclusions. This report, like others the Treasurer has commissioned, fails to account for the incredible complexity of our healthcare system, including health insurance companies’ role in rising costs, and does nothing to advance affordable, high-quality healthcare in our state.
The reality of the current situation in North Carolina is that a majority of hospitals have negative operating margins this year and that both Medicaid and Medicare reimburse hospitals for caring for patients below the actual costs of providing that care. We are seeing more hospitals laying off staff because of their financial situations. Our emergency departments are overcrowded with patients and running out of bed space. Patients with behavioral health needs are staying in hospitals for weeks because there is nowhere for them to go for advanced treatment.
Treasurer Folwell’s response to hospitals in crisis is to commission a report that complains about hospitals following state and federal guidelines and regulations. He could be using his platform to improve North Carolinians’ access to affordable, high-quality care by promoting Medicaid expansion, or by working on policy solutions for the staggering mental health crisis. Instead, he has issued a report that fails to explain important information in the following ways:
- Unlike commercial insurance, health systems do not negotiate for payments from Medicare and Medicaid. Hospitals do not get to decide what to charge Medicare or Medicaid for services. They are paid according to the Centers for Medicare and Medicaid Services (CMS). On average, that payment only covers about 84 cents of every dollar spent by a hospital caring for a patient with Medicare. Data from the American Hospital Association shows the average shortfall, or underpayment, in 2020 was more than $75 billion for Medicare.
- It is curious why the Treasurer continues efforts to discredit those people who have made it their calling to care for all and are following state and federal rules and regulations related to financial and community benefits reporting. When the Treasurer attacks healthcare providers and hospitals, he is accusing good people who serve the public of not being transparent, including members of hospital boards of trustees who are volunteers from the local communities.
- Roughly 86.6% of North Carolina hospitals have 67% of their inpatient days paid by Medicare and Medicaid. Because these payments are fixed and do not account for variability in the market, including the increased labor and supply costs we’re currently facing nationwide, health systems are increasingly facing financial hardships.
- The Treasurer claims North Carolina is one of the most monopolistic states in the nation for care, and that the average worker now loses 20% of a paycheck to health care costs. But he fails to explain that the biggest culprit is health insurance companies. Blue Cross Blue Shield of North Carolina controls 97% of the individual private health insurance market and is the administrator of the state health plan, which Mr. Folwell oversees.
- Hospitals across our state are incredibly dedicated to their charitable missions. In 2020 alone, North Carolina hospitals collectively contributed approximately $5.9 billion in community benefits, including roughly $1.2 billion in charity care.
- Further, on the limitations page, it acknowledges that conclusions and statements were made despite having incomplete data from several large health systems and government-owned hospitals.
It is curious why the Treasurer continues efforts to discredit those people who have made it their calling to care for all and are following state and federal rules and regulations related to financial and community benefits reporting. When the Treasurer attacks healthcare providers and hospitals, he is accusing good people who serve the public of not being transparent, including members of hospital boards of trustees who are volunteers from the local communities.
Instead of bringing transparency and clarity to the public, Treasurer Folwell has created an incomplete and complicated report that fails to address how he will provide more affordable healthcare to the state employees and retirees. North Carolinians deserve truthful and transparent information. This report fails to deliver it.
North Carolina hospitals and health systems stand ready to work with the Treasurer and others to design a State Health Plan that is better for all.
About NCHA
Founded in 1918, North Carolina Healthcare Association (NCHA) is the united voice of the North Carolina healthcare community. Representing more than 130 hospitals, health systems, physician groups and other healthcare organizations, NCHA works with our members to improve the health of North Carolina communities by advocating for sound public policies and collaborative partnerships and by providing insights, services, support and education to expand access to high quality, efficient, affordable and integrated health care for all North Carolinians.
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