Hospitals Aren’t Quite Singing the Blues, but Brace for Hit Parade

January 12th, 2015

It could have been worse.

Congress has passed legislation that temporarily prevents a 27.4% Medicare payment cut to physicians. As usual, Congress looked to hospitals to find the money to pay for it.

Here’s a summary of the damage from the American Hospital Association:

• The legislation reduces reimbursement for Medicare bad debt to 65% from 70% for inpatient acute care hospitals in fiscal year 2013, and from 100% to 65% for critical access hospitals over three years.
• It expands the therapy cap and exceptions process to include services provided in hospital outpatient departments.
• It reduces Medicaid Disproportionate Share Hospital payments in 2021.

The news wasn’t all bad. The AHA points out that even larger cuts were avoided, for the time being, including:

• The legislation doesn’t cut payments to HOPDs for E&M services.
• It doesn’t grand CMS new authority to cut Medicare inpatient rates across-the-board through retrospective coding adjustments in FYs 2010-2012.
• The legislation doesn’t weaken the prohibition on physician self-referral to new physician-owned hospitals, and it doesn’t loosen the restrictions for growth on grandfathered facilities.
• Also, it extended several important expiring provisions, including: Section 508 hospital wage index reclassifications (through March 31); the outpatient hold-harmless provision for rural hospitals and sole community hospitals with no more than 100 beds (through Jan. 1, 2013); payments for the technical component of certain physician pathology services (through June 30); and ambulance add-on payments (through Dec. 31).

But the AHA points out that once a cut is proposed, Congress never forgets. It says it’s like a hit parade: It’s replayed again and again every time finances are discussed. The solution? Get the message about your critical healthcare role on the air: Educate the public. Educate the Congressional candidates. And keep a song in your heart.