Changes in Tricare payments to eat at hospital budgets

[unhappycamper]

Changes in Tricare payments to eat at hospital budgets
By Amy Jeter
The Virginian-Pilot
© December 7, 2010

A change in the way the government pays for outpatient military health care will save Washington nearly half a billion dollars a year, but it will bite millions out of Hampton Roads hospitals' budgets.

Bon Secours Hampton Roads Health System estimates the change will cost its hospitals a total of $22 million a year.

Sentara Healthcare has predicted a similar total annual decrease for its Hampton Roads hospitals. That $22.5 million represents an estimated 1.5 percent of the hospitals' annual revenue, executives said.

Government officials said the new rates reimburse hospital costs with enough extra for "a reasonable profit" and give incentives for hospitals to be more efficient, but local hospital executives said the new rates fall short of covering their expenses.

"This is the first time that we've seen the federal government do something like this: force the hospitals to take care of people at a negative margin for something other than entitlement programs," said Robert Broermann, Sentara's chief financial officer.