Hospitals on Losing End of Doc Fix

The budget package that Congress passed in the 11^th hour Tuesday to avert widespread tax increases and spending cuts has also blocked a 26.5% cut in Medicare payments to doctors; however, hospitals are bearing a large portion of the responsibility when it comes to financing this so-called “doc fix.”

As Kaiser Health News’ Mary Agnes Carey writes in her column, the bill requires hospitals to pay about half of the approximately $30 billion cost of stopping the 26.5% payment cut for Medicare physicians, a reduction that stems from a payment formula created in 1997 deficit reduction law.

Westby G. Fisher, MD, details the healthcare cuts that are taking place in order to accomplish the 1-year patch of $25 billion over the next 10 years. In short, hospitals will undergo more audits of their billings to recoup overcoding charges and will also “see an extension of lower Medicaid payments to hospitals that treat a high number of uninsured or low-income beneficiaries, known as ‘disproportionate share hospitals.’”

Needless to say, hospital leaders are not pleased with the decision. Chip Kahn, president and CEO of the Federation of American Hospitals, stated his displeasure by saying that “it is not in the best interest of patients or those who care for them to rob hospital Peter to pay for fiscal cliff Paul.” Louise Radnofsky of the Wall Street Journal reports that many hospitals are calling the bill a “raid on their funding, which has already been subject to cuts in the healthcare overhaul.” Shawn Gremminger, a lobbyist for the National Association of Public Hospitals and Health Systems, also voiced his concern, saying that “this is yet another time when hospitals have borne the brunt” and added that “it’s a fairly significant hit.” And Sean Hopkins, Senior Vice President of the New Jersey Hospital Association, pointed out that “hospital Medicare payments continue to be viewed as a big bucket you can take a little bit out of with without making a difference. But you can die a death of a thousand cuts.”

Around the Web

‘Doc Fix’ In ‘Fiscal Cliff’ Plan Cuts Medicare Hospital Payments [Kaiser Health News]

Cliff Deal Irks Hospitals [Wall Street Journal]

The Fix that Failed [The Health Care Blog]

Hospitals to Eat Medicare Budget's 'Doc Fix' [Philadelphia Inquirer]