Health Officials Address Reimbursement Challenges for Medicare and Medicaid on Guam
September 10, 2025 | General Government Operations and Appropriations , Legislative, Guam
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The 38th Guam Legislature convened for its Third Special Session on September 10, 2025, focusing primarily on the financial challenges faced by the Guam Memorial Hospital (GMH) regarding reimbursement for medical services. Key discussions highlighted the complexities of insurance reimbursements and the hospital's ongoing efforts to secure adequate funding.
During the session, concerns were raised about GMH's reliance on revenue tax to supplement its income tax, with a particular emphasis on the difficulties in obtaining full reimbursement for services rendered. A representative from GMH explained that the hospital often does not receive complete payment from Medicare and Medicaid due to predetermined rates that do not reflect the actual costs of care on Guam. This has led to significant financial strain, with outstanding vendor payments reaching $26 million.
The dialogue also touched on the challenges of dealing with insurance claims, where denials can occur for various reasons, including coding errors or services not covered by the patient's insurance plan. The representative noted that typically, patients are responsible for about 20% of their medical bills, which adds to the financial burden on both the hospital and the patients.
In response to these ongoing issues, GMH is exploring the use of a collection agency to recover funds from patients who do not have insurance or fail to file taxes. This initiative is part of a broader strategy to improve the hospital's financial health, alongside continuing its garnishment program for tax refunds.
The session underscored the urgent need for changes in federal reimbursement rates to better align with the rising costs of healthcare in Guam. Lawmakers expressed a commitment to advocate for these changes, recognizing that timely and adequate reimbursement is crucial for the sustainability of GMH and the health services it provides to the community.
During the session, concerns were raised about GMH's reliance on revenue tax to supplement its income tax, with a particular emphasis on the difficulties in obtaining full reimbursement for services rendered. A representative from GMH explained that the hospital often does not receive complete payment from Medicare and Medicaid due to predetermined rates that do not reflect the actual costs of care on Guam. This has led to significant financial strain, with outstanding vendor payments reaching $26 million.
The dialogue also touched on the challenges of dealing with insurance claims, where denials can occur for various reasons, including coding errors or services not covered by the patient's insurance plan. The representative noted that typically, patients are responsible for about 20% of their medical bills, which adds to the financial burden on both the hospital and the patients.
In response to these ongoing issues, GMH is exploring the use of a collection agency to recover funds from patients who do not have insurance or fail to file taxes. This initiative is part of a broader strategy to improve the hospital's financial health, alongside continuing its garnishment program for tax refunds.
The session underscored the urgent need for changes in federal reimbursement rates to better align with the rising costs of healthcare in Guam. Lawmakers expressed a commitment to advocate for these changes, recognizing that timely and adequate reimbursement is crucial for the sustainability of GMH and the health services it provides to the community.
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