Health Plans For State Employees Use Medicare’s Hammer On Hospital Bills

The new strategy of some health plans for state employees is to pay hospitals a certain percentage above the basic Medicare reimbursement rate. It allows hospitals a small profit, the states say, while reducing costs to states and patients.

Some states have begun using Medicare reimbursement rates to recalibrate how they pay hospitals. If the gamble pays off, more private-sector employers could start doing the same thing.

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