A Review of the Evidence on Cost-Shifting

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HCFO Brief May 2011 FINAL.pdf

Medicare payment policy remains an important issue as the Patient Protection and Affordable Care Act (ACA) calls for reduced Medicare payments to health care providers, including hospitals. In the past, certain stakeholders have argued that lower payments to hospitals by Medicare and Medicaid can lead to cost-shifting, charging private payers more to compensate for shortfalls in payments from public programs. Austin Frakt, Ph.D., of Boston University undertook the first systematic review of the literature on cost-shifting since the 1990s. Frakt's review updates this earlier work, and frames cost-shifting in today's policy context. The results are summarized here.