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Top 6 Financial Game Changers for Hospitals

Karen Minich-Pourshadi, for HealthLeaders Media, December 6, 2010
  1. Changes in Reimbursement. For years Medicare reimbursement cuts have been proposed and ultimately blocked. And although there was a last minute delay on the cuts that were supposed to take effect Dec. 1, it looks like Medicare reimbursement cuts may become a reality for diagnostic imaging and the like. After President Obama described Medicare Advantage as a "waste" and Congress agreed, $132 billion worth of cuts to the program over 10 years appeared in the health reform package—with the first payment cuts expected to occur in 2011.

    Of course, when Medicare reimbursement rates decrease, the commercial payers tend to fall in line with similarly reduced payments. Not to mention that the medical loss ratio portion of the reform bill will take effect in 2011 for payers will likely trickle out and be reflected in more stringent contract negotiations between providers and payers. After all, payers don’t want to lose money either.
  2. Business-Expenses Rule. Did you miss this one? If the process of getting reimbursed by payers isn’t paper- and labor-intense enough for most finance department, the IRS is looking for more details on your interaction with your vendors. So, get ready for more paperwork in 2011. As of last week, the Senate failed to adopt language that would repeal the Health Care Reform Laws provision on business expense reporting. The business-expense or 1099 rule will require the annual reporting of expenses to individual vendors in excess of $600—that likely encompasses all of your vendors.  
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2 comments on "Top 6 Financial Game Changers for Hospitals"


kit (12/10/2010 at 4:25 PM)
Mr. Sigmond, Your white papers included support for Single Payer. Could you please respond in light of the AHIP/Chamber of Commerce/Fox Media consolidated effort against that?

bob Sigmond (12/9/2010 at 1:36 PM)
Here is a seventh Financial Game Changer: Make sure that there is reimbursement for every patient, including all those who can't or won't pay. You can manage these patients so as Rifoma Cadebresto provide higher quality care and also save at least a quarter of the money you are spending on such patients. For details, see my paper published in Inquiry "Doing Away with Uncompensated Care", which is on my web site, sigmondpapers.org, Or call me at 215-561-5730.