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Hospitals Fear Medicare Cuts

With fiscal cliff” negotiations stalling and entitlement cuts and changes pending in Congress, some hospitals fear they’ll be left to fill in gaps left by Medicare cuts. Both President Obama and House Republicans have proposed raising Medicare premiums and savings of at least $400 billion over 10 years.

The New York Times reports: “[T]here is already discussion of cutting special payments to teaching hospitals and small rural hospitals. Lawmakers are also considering reducing payments to hospitals for certain outpatient services that can be performed at lower cost in doctors’ offices,” although final details may not be worked out until next year.

Hospitals already face $155 billion in cuts over a decade as part of the Affordable Care Act, they now must deal with the prospect of losing billions more, the Times reports.

Some hospital executives and provider groups argue large cuts will affect beneficiaries- especially seniors and the poor. “There is no such thing as a cut to a provider that isn’t a cut to a beneficiary,” said Dr. Steven M. Safyer, the chief executive of Montefiore Medical Center.

“It is not particularly honest to say that provider payment reductions won’t affect beneficiaries. They’ll affect staffing, they’ll affect services, they’ll affect access,” Rich Umbdenstock, president of the American Hospital Association, told the Wall Street Journal. “The cost of care does not go away.”

Illinois’ News-Gazette reports hospital executives already tightening up spending as much as possible to get ready for cuts on the way- either the 2 percent across-the-board sequester or possible debt deal. But they can’t plan for everything, they say.

“It’s hard to know what to be concerned about,” said Craig Sheagren, vice president of finance at Sarah Bush Lincoln Health Center, Mattoon Ill. “It’s kind of like crying, ‘The sky is falling. The sky is falling.’ ”

If no meaningful legislation passes to extend the federal debt limit, Medicare payments to hospitals and doctors will suffer deep cuts anyway, although much less than the current proposals of the President and Speaker Boehner, an estimated $123 billion from 2013 to 2021; doctors will face a 26.5 percent cut in their Medicare fees.