American Hospital Association

The Balanced Budget Act (BBA) of 1997 is projected to cut $71 billion in Medicare payments to hospitals, which may cause 7 out of 10 hospitals to have negative total Medicare margins by the year 2002. For all hospitals, total Medicare margins are projected to be around negative 4.4 percent, and margins for outpatient, hospital-based home health, and PPS-exempt services will all be negative under the BBA. The BBA reduced payments for most hospital services, including inpatient acute care, outpatient care, home health care, skilled-nursing care, medical education, and indigent care. The study included hospital specific analyses for inpatient PPS and PPS-exempt hospital services, hospital-based home health services, and outpatient hospital services. The findings report Medicare payments and margins for these services, as well as total Medicare payments and margins.

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