Proposed Medicare, Medicaid Cuts may Force Docs to Stop Seeing Patients

by Lakshmi Gopal on  August 29, 2011 at 9:13 PM Health Insurance News
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US lawmakers have for sometime now been struggling with facts and figures on how to cut federal spending by $1.2 trillion over the next 10 years.
 Proposed Medicare, Medicaid Cuts may Force Docs to Stop Seeing Patients
Proposed Medicare, Medicaid Cuts may Force Docs to Stop Seeing Patients

There are proposals to cut Medicare and Medicaid programs that could make it impossible for many hospitals to remain profitable and force doctors to stop seeing Medicare patients.

As part of a deal struck earlier this month to raise the nation's debt ceiling, a bi-partisan "supercommittee" has until Nov. 23 to make recommendations for spending cuts. If Congress cannot agree on a plan, automatic spending cuts will begin in 2013 - including a 2 per cent reduction in Medicare reimbursements to hospitals and health care providers.

That change will result in the loss of $1.3 billion for Pennsylvania hospitals alone over a nine-year period, according to Michael Strazzella, vice president of federal relations for the Hospital and Healthsystems Association of Pennsylvania.

But proposals being studied to avoid the automatic cuts may end up being worse for hospitals, doctors and patients, experts said. Suggestions include:

A 30 per cent cut to Medicare reimbursements to physicians, which many doctors say would force many in their ranks out of business.

Converting Medicaid to a block grant program, which would cut Pennsylvania's share of federal funding by about 31 per cent.

In late December, President Barack Obama signed legislation renewing the region's wage index set under 2003's Medicare Modernization Act, which allowed area hospitals to retain more than $34 million in Medicare reimbursements.

The act increased Medicare reimbursements to area hospitals by about 8 percent, elevating them to what hospitals in the Allentown/Easton areas receive. The fix helps local hospitals offer wages comparable to hospitals in Allentown, Easton and even parts of New Jersey, Mr. Strazzella said, but needs to be extended each year by legislators.

A 2 per cent reduction in Medicare benefits would represent a significant blow to that program, threatening hospitals' ability to recruit and retain employees, he added.

U.S. Sen. Bob Casey, a Democrat, has supported the renewal of the legislation that extends the wage fix, his staffers said Friday, and will continue to support it in the future. Also in danger are Medicare reimbursements to doctors, which are slated to be cut 30 percent by the end of the year.

The cuts, part of legislation meant to keep Medicare payments increases equal to economic growth, have been delayed by Congress each year since 2003. But an information sheet released by Henry J. Kaiser Family Foundation this month estimated that delaying the 30 percent cut another year would cost $25 billion.

If the cuts go through, doctors across the country have warned that they will be unable to continue seeing Medicare patients because the reimbursements would not cover the cost of treatment, Mr. Strazzella said.

"The American Medical Association says (cutting reimbursements to doctors) will force many doctors to retire," he said. "They will not be able to maintain their practices."

Proposals to cut federal funding for Medicaid, which helps the disabled and the needy, would likely cause a huge uptick in unpaid hospital bills, local hospital officials said.

Source: Medindia

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The $1.2 trillion automatic cuts that will be made if the 12-member committee falls short must be kept in mind. Although beneficiaries would be technically “safe” from this 2% cut in Medicare reimbursement, they will still be affected by what happens when doctors stop seeing Medicare patients. This 2% cut would be in addition to the already 6% decrease that was issued for the phasing in of Obamacare.

In response to these cuts there is a growing trend in hospital consolidation where private payers are charged more to make up for the public payers’ lower reimbursement levels. With the institution of Obamacare, this cost shifting will continually become more pronounced, raising premiums for the privately insured

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