An analysis of the critical problem of trauma center reimbursement

There is a widespread perception that many trauma centers are poorly reimbursed, and many hospitals that once cared for trauma victims no longer do so, primarily for financial reasons. The problem is blamed on both uninsured and underinsured patients, but data supporting this perception are lacking. To determine the validity of these perceptions and to better understand the nature of trauma center reimbursement, a survey was conducted. A questionnaire on the volume of trauma seen annually and the reimbursement experience for trauma center (TC) and hospital (HO) patient populations was mailed to representative but nonrandomly chosen trauma centers. Seventy-one surveys were mailed and 25 were returned (35%). There were 15 Level I and 10 Level II centers; 16 were urban, seven were suburban, and two were rural. Eighteen centers (72%) reported significant underfunding of the TC in contrast to the HO, and 11 indicated that they would not be able to continue their current level of TC services with present reimbursement. For Medicare patients, HO cost recovery rates averaged 93%, but recovery rates were only 64% for TCs. For Medicaid beneficiaries, the HO cost recovery rate averaged 85%, but it was only 49% for TCs. Thirty-one percent of TC patients had no insurance coverage at all, in contrast to only 9% of HO patients. An aggregate loss equal to 19.9% of total costs was reported by respondents. This survey, while not representative of trauma centers as a whole throughout the United States, does suggest that there is a basis for the perception of underfunding of trauma care and indicates that such underfunding results from the combination of adverse selection and disproportionate share. We also describe a new method for assessing and comparing trauma center reimbursement.