Earlier quoted context omitted.
Hospitals receive extra payments when they have an unusual number of Medicare patients. https://www.medicaid.gov/medicaid/finance/dsh/index.html It’s just another case where the government splits spending across multiple programs.
When they have a disproportionate share of Medicaid , not Medicare patients. And the added payment isn’t that much. Generally Medicaid pays below cost. Medicare is reasonable and leaves providers with a small profit (single digit percentage).
From 2015 to 2017 Medicare lowered it’s uncompensated care payments. However, that program covers uncompensated care underpayment. Medicare explicitly does not pay for everything at hospitals: https://www.medicare.gov/coverage/inpatient-hospital-care