What's Happening?
A University of Minnesota analysis has revealed that the Centers for Medicare & Medicaid Services (CMS) overpaid many hospitals while missing others in its relief program following the 2024 Change Healthcare cyberattack. The Change Healthcare/Optum Payment
Disruption (CHOPD) program, which distributed $3.3 billion in accelerated payments, was intended to support providers whose revenue cycles were disrupted by the cyberattack. However, the study found that a third of the hospitals received more than $1 million in excess of their Medicare revenue losses, while another third did not receive enough to cover their losses. The analysis identified 312 hospitals that did not receive any funds despite experiencing significant revenue disruptions. The findings, published in Health Affairs, suggest that the CMS relief program did not adequately target the highest-need recipients.
Why It's Important?
The findings highlight significant inefficiencies in the CMS's approach to distributing relief funds, which could have long-term implications for how future disruptions are managed. The overpayment and underpayment issues suggest a need for more precise targeting of funds to ensure that hospitals most in need receive adequate support. This is particularly important for rural and critical access hospitals that rely heavily on Medicare and are more vulnerable to financial strain. The study's recommendations for adjusting relief amounts and improving provider outreach could inform future policy changes, potentially leading to more equitable distribution of funds in similar situations.
What's Next?
The study suggests that CMS could improve its relief programs by adjusting the relief amounts and incorporating outlier payments for hospitals experiencing severe disruptions. Additionally, enhancing provider outreach could ensure that more hospitals in need receive the necessary support. These changes could be crucial in preparing for future disruptions, ensuring that relief efforts are more effectively targeted and that hospitals can maintain financial stability during crises.
