Fiscal cliff legislation means $15B less in Medicare for hospitals

Hospitals need to cut patient load

Tim Samoff/Flickr Creative Commons

The fiscal cliff deal set aside cuts in Medicare payments for doctors, but not for hospitals. The California Hospital Association calls that a "huge hit."

The last-minute deal by Congress to avert dreaded fiscal cliff tax hikes and spending cuts has preserved full Medicare payments to doctors through 2013.   

Had Congress failed to reach a deal, Medicare payments to doctors would have been cut by 27 percent beginning this year – a move that may have resulted in many physicians closing their doors to Medicare patients.

And while the agreement is good news for doctors, hospitals aren’t so happy. That's because Congress financed the "doc fix" in part with about $15 billion in Medicare reimbursements that otherwise would have gone to hospitals over the next decade.

Jan Emerson-Shea, vice president of external affairs for the California Hospital Association, says hospitals in the state "fully support the need to address the physician payment issues —  which are significant and if not addressed would likey result in many physicans no longer willing to accept Medicare patients."

But, says Emerson-Shea, "we just don't believe those cuts should come at the expense of hospitals."

"Hospitals are the place where many, many patients receive their care, either through the ER or planned hospital admissions," she says.

Emerson-Shea says the hospital reimbursement cuts come as a “huge hit” to hospitals, which are already scrambling to accommodate large Medicare cuts set out in the Affordable Care Act. 

"You can fix the doc payment situation in a vacuum," she says. "You have to look at the entire health care system and simply taking money from Peter to pay Paul is not a long term solution."

Emerson-Shea says she’s concerned  the cuts may eventually force some independent hospitals and those in rural areas that serve high volumes of Medicare patients to shut their doors.

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