A deal reached this week by Congress to extend the payroll tax through the end of the year also includes cuts to hospital payments as a way of continuing the "doc fix" through 2012.
The fix ensures payments to physicians treating Medicare patients will not fall by 27%, which would have happened March 1 with no deal. The bill cleared the House of Representatives and the Senate on Friday. It still must be signed by President Obama, but that is considered a formality.
The cost of extending the doc fix for the next 10 months is close to $20 billion. Cuts to Medicare include a reduction in payments for bad debt — the portion of a bill a patient is unwilling or unable to pay — from 70% to 65% beginning in fiscal year 2013.
Other reductions are to critical access hospitals, cutting their payment rate from 100% to 65% of costs during a three-year period, and a 2% cut in payment rates for clinical laboratory services in 2013.
Provisions affecting Medicaid include a year-long continuation of the phasing-down of payments to hospitals that serve disproportionate numbers of low-income patients who are likely to be uninsured.
The bill also cuts $5 billion from the prevention and public health fund of the Affordable Care Act during the next decade.
Some of the proposed reductions are similar to those in the federal budget submitted by Obama for fiscal year 2013. That proposal includes $268 billion in cuts to Medicare and $52 billion in cuts to Medicaid over the next 10 years (http://bit.ly/yi7SYF). It calls for reductions to Medicaid payments to hospitals serving high numbers of uninsured patients and to Medicare payments for bad debt.
It remains to be seen whether such reductions will apply in the federal budget now that they are part of the payroll tax bill. Negotiations in Congress will determine the budget specifics.
As it did with Obama’s budget, the American Hospital Association expressed concern over the payroll tax bill, saying it could jeopardize access to healthcare as well as jobs.
"While we support ensuring that physicians will not see their Medicare payments reduced, we are extremely disappointed that once again Congress is putting seniors' access to hospital services in jeopardy through arbitrary reductions to hospitals," AHA President and CEO Rich Umbdenstock said in a news release. "Today's proposal would add an unnecessary strain to hospitals that care for vulnerable populations.
"We need thoughtful approaches to improving healthcare, not indiscriminate cuts that harm patients' access to care."
The fix ensures payments to physicians treating Medicare patients will not fall by 27%, which would have happened March 1 with no deal. The bill cleared the House of Representatives and the Senate on Friday. It still must be signed by President Obama, but that is considered a formality.
The cost of extending the doc fix for the next 10 months is close to $20 billion. Cuts to Medicare include a reduction in payments for bad debt — the portion of a bill a patient is unwilling or unable to pay — from 70% to 65% beginning in fiscal year 2013.
Other reductions are to critical access hospitals, cutting their payment rate from 100% to 65% of costs during a three-year period, and a 2% cut in payment rates for clinical laboratory services in 2013.
Provisions affecting Medicaid include a year-long continuation of the phasing-down of payments to hospitals that serve disproportionate numbers of low-income patients who are likely to be uninsured.
The bill also cuts $5 billion from the prevention and public health fund of the Affordable Care Act during the next decade.
Some of the proposed reductions are similar to those in the federal budget submitted by Obama for fiscal year 2013. That proposal includes $268 billion in cuts to Medicare and $52 billion in cuts to Medicaid over the next 10 years (http://bit.ly/yi7SYF). It calls for reductions to Medicaid payments to hospitals serving high numbers of uninsured patients and to Medicare payments for bad debt.
It remains to be seen whether such reductions will apply in the federal budget now that they are part of the payroll tax bill. Negotiations in Congress will determine the budget specifics.
As it did with Obama’s budget, the American Hospital Association expressed concern over the payroll tax bill, saying it could jeopardize access to healthcare as well as jobs.
"While we support ensuring that physicians will not see their Medicare payments reduced, we are extremely disappointed that once again Congress is putting seniors' access to hospital services in jeopardy through arbitrary reductions to hospitals," AHA President and CEO Rich Umbdenstock said in a news release. "Today's proposal would add an unnecessary strain to hospitals that care for vulnerable populations.
"We need thoughtful approaches to improving healthcare, not indiscriminate cuts that harm patients' access to care."
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