AHA Lobbies Congress for 'Shared Sacrifice'

The American Hospital Association is calling for “shared sacrifice” from the greater society – even if it means higher taxes or raising the Medicare eligibility age – if that would help the nation’s hospitals avoid further reimbursement cuts over the next decade.

“It’s the theme of shared sacrifice,” AHA Executive Vice President Rick Pollack told HealthLeaders Media. “If we are going to tackle these major problems, you can’t keep going back to the same well. It is everybody’s responsibility to step up to the plate in the name of shared sacrifice.”

“Cutting providers and rationing the provider payments doesn’t represent reform. It represents the same old, same old. Cutting providers eventually does harm beneficiaries,” he says. “If we have this big national problem, shouldn’t everyone be part of solving it?”

AHA last month compiled for Congress and the Medicare Payment Advisory Commission (MedPAC) more than 40 recommendations amounting to $2 trillion in either cuts or new revenues that have been proposed by Republicans, Democrats, and special interest groups.

Pollack says AHA leaders attended a “fly-in” last week on Capitol Hill “to make the case that, from our perspective, not only have we already stepped up to the plate in the name of shared sacrifice, but our sector is absorbing more change than virtually any other sector in society.”

Pollack says most anything on the list would be preferable to imposing more cuts on hospitals, which he says have already agreed to take a $155 billion cut in Medicare reimbursements over 10 years under the Affordable Care Act, and have also seen huge cuts in state Medicaid programs.

“A lot of people might not like the recommendations, but our membership has felt that we have to be responsible in suggesting alternative solutions to address the problems and it needs to be done in the framework of shared sacrifice, which we have already done a lot of on our own,” he says.

Last week, MedPAC ignored the AHA’s pleas and instead approved its plan to repeal the ineffective sustainable growth rate (SGR) formula. In its place will be an equally controversial plan that will include, among other steps, cuts in reimbursement payments to specialists and frozen payments for primary care physicians.

The MedPAC proposal calls for a total of $335 billion in reimbursement reductions over 10 years. The plan’s “doc fix” would account for $100 billion. Specialists’ reimbursement rates would fall 5.9% each year for three years and then freeze for the following seven years. PCP reimbursements would be unchanged for the 10 years.

• Cuts to Medicare Part D drug plans (32%)
• Post–acute care facilities (21%)
• Medicare beneficiaries (14%)
• Hospitals (11%), labs (9%)
• Durable medical equipment (6%)
• Medicare Advantage plans (5%)
• Other providers (2%)

The Medicare commission has no authority beyond the recommendation, and Congress is free to ignore the findings, as it has for the last decade.

However, as the budget deficit has become a huge political issue, the six lawmakers on the bipartisan “super Committee” charged with finding a budget resolution are likely to give the proposal more consideration. Unless some action is taken on Jan. 1, 2012, Medicare payment rates for physicians will drop by 29.4%.

Pollack says AHA has supported the repeal of the SGR, but not if it meant reimbursement cuts to hospitals to make up the difference. “From our perspective, this is robbing Peter to pay Paul,” Pollack says. “We employ a lot of physicians and we want to see this fee problem fixed, but we don’t think it is productive to cut one provider to fix another provider’s problem. We have a stake in this as well.”

As for raising the Medicare eligibility age, Pollack says he is not overly concerned with any blowback for hospitals because that idea has already been floated by House Republicans and, however briefly, by President Obama.

“On the retirement age, things get boiled down into sound bites,” he says. “If you look at that option in particular, from our perspective you have to be thoughtful about it. We always assumed that if you looked at this option you had to have health exchanges in place so that those people who are between the new Medicare eligibility age and the old one would get access to coverage through exchanges. For those of limited means, that would be subsidized.”

Pollack says AHA also has acknowledged that some exceptions would have to be built into raising the Medicare eligibility age. “Not everyone can work past 65. For people that have physical limitations by virtue of the work they have done as opposed to people who do desk work, you have to have exceptions,” he says. “None of that is really fleshed out. That is the way we would view that option.”