Medicare Cuts From Sequestration Hitting Nonprofit Hospitals

Sequestration added another threat to the shaky finances of nonprofit hospitals, as the universal federal spending cuts took effect on April 1, Moody’s Investors Services said on Monday, according to Reuters.

Reimbursements paid by the Medicare health-insurance program was slated to drop by 2 percent. That’s expected to lower revenues to hospitals, doctors, and other health-care providers by $11-billion this year.

Moody’s issued a negative assessment for nonprofit hospitals in January, saying slow revenue growth and possible reductions in federal spending and insurers’ reimbursements dampened the outlook in 2013.

“The cuts exacerbate an already challenging operating environment for not-for-profit hospitals as many already face low revenue growth from both government and private insurance payers,” Moody’s said. The hospitals tend to serve large low-income populations.