Skip to main content
Sister Publication Links
  • ESG: THE NEW IMPERATIVE
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • COVID-19
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Transformation
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Digital Health
  • Insights
    • ACA 10 Years After
    • Best Practices
    • Special Reports
    • Innovations
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Supply Chain
    • - Hospital at Home
    • - Workplace of the Future
    • - Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • Data Center
    • Data Center Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • MORE +
    • Contact Us
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Hospitals
December 01, 2022 05:25 PM

More Texas hospitals risk closing their doors as Medicare cuts loom

Caroline Hudson
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    hospital Texas

    Texas health officials are sounding the alarm as almost half of hospitals in the state operate in the red.

    More than 9% of hospitals in the Lone Star State are at risk of closure, compared with 4.7% in 2020, according to a report released this week from consulting firm Kaufman Hall. The firm identified a hospital’s closure risk based on unsustainable trends with its operating margin, days cash on hand and debt-to-capitalization ratios.

    Hospitals across the country are struggling to break even due to high labor costs, inflation and a weak investment market. Rural hospitals face a disproportionate risk – 26% of rural hospitals in Texas are at risk of closure this year, according to the report. The Center for Healthcare Quality and Payment Reform estimates 30% of the roughly 1,800 rural hospitals nationwide are at risk of closing.

    John Hawkins, president and CEO of the Texas Hospital Association, said federal funding to tackle the COVID-19 pandemic stabilized many facilities in the short-term, but it wasn't enough.

    “I think that part of the misconception out there is that somehow because of all this federal funding, hospitals are in pretty good shape. … A lot of the federal funding actually went to areas of the country that received or experienced their surges much in advance of the two surges that Texas experienced,” Hawkins said at a media briefing Wednesday. 

    Health officials in Texas hope Congress will delay further reductions to Medicare payments via sequestration. A 1% reduction kicked in April 1, after a temporary suspension during the COVID-19 pandemic. The cuts increased to 2% on July 1. Another 4% reduction in Medicare reimbursements is scheduled for next year through the Pay-As-You-Go Act. 

    Starting in 2023, the Centers for Medicare and Medicaid Services will offer a “Rural Emergency Hospital” designation for facilities that phase out inpatient care and expand in the outpatient setting. The program, authorized in 2020, is meant to help hospitals scale back operations but still maintain some critical services.

    Texas hospitals have reported $3.2 billion in losses this year to date, according to Kaufman Hall.

    “That financial strain, I think, ultimately does impact patient care,” Hawkins said. “Those Medicare cuts are [for] all providers, so it’s a big deal particularly for physicians and then obviously home health, nursing. All of those folks are dealing with a lot of these same structural issues going forward.”

    He said leaders are also watching the effect of Medicare Advantage on rural facilities, some of which are hesitant to take on negotiations with MA insurers and handle the prior authorization requests. 

    Hawkins is in favor of Medicaid expansion, which he said would benefit small businesses and service-level employees, and alleviate the need for some charity care.

    Some Republican legislators have long pushed back on expansion in their respective states, arguing the program is inefficient and creates additional tax burden. For example, last month Republicans in North Carolina pushed additional discussion of Medicaid expansion into next year. Despite GOP opposition in South Dakota, the state's voters approved an expansion in November, leaving 11 states that have not adopted changes authorized by the Affordable Care Act.

    The Texas Hospital Association is now pushing specifically for Medicaid coverage for mothers one year postpartum and for behavioral health patients, which legislators have seemed open to in the past. The lawmakers have also shown a willingness to enhance rates for rural hospitals, Hawkins said.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Pediatric Hospitals - children hospitals
    'Crisis mode' for children's hospitals amid RSV surge
    Most Popular
    1
    More healthcare organizations at risk of credit default, Moody's says
    2
    Centene fills out senior executive team with new president, COO
    3
    SCAN, CareOregon plan to merge into the HealthRight Group
    4
    Blue Cross Blue Shield of Michigan unveils big push that lets physicians take on risk, reap rewards
    5
    Bright Health weighs reverse stock split as delisting looms
    Sponsored Content
    Modern Healthcare A.M. Newsletter: Sign up to receive a comprehensive weekday morning newsletter designed for busy healthcare executives who need the latest and most important healthcare news and analysis.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • COVID-19
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Digital Health
    • Insights
      • ACA 10 Years After
      • Best Practices
      • Special Reports
      • Innovations
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Supply Chain
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • MORE +
      • Contact Us
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing