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PPACA plans could squeeze hospitals

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If the public exchanges succeed, they could force noprofit hospitals to cut their rates, according to analysts at Moody’s Investors Service.

Many of the carriers selling individual and small-group coverage through the Patient Protection and Affordable Care Act exchange system have tried to keep premiums low by using narrow provider networks.

The narrow qualified health plan networks are affecting off-exchange networks, because some carries are selling similar plans on both markets.

“If narrow networks are successful, we expect hospital reimbursement to drop,” Daniel Steingart, a Moody’s analyst, and colleagues write in an analysis aimed at the creditors of nonprofit hospitals. “In narrow networks, hospitals accept lower reimbursement in hopes of gaining market share.”

The PPACA exchange program and other PPACA rules and programs could also hurt hospitals’ 2015 revenue by cutting carrier profits, the analysts write.

“We expect negotiations for 2015 hospital reimbursement levels to be dynamic,” the analysts say.

The analysts say hospitals will try to make up for some of the lost revenue by bargaining for deals that provide rewards for successful efforts to control costs.

PPACA could help hospitals by reducing the number of uninsured patients, but PPACA could offset that by increasing the number of patients who have high deductibles and are unable to pay the bills they run up before they meet the deductibles, the analysts say.

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