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What the Debt Ceiling Crisis Means to Healthcare

Karen Minich-Pourshadi, for HealthLeaders Media, August 15, 2011

This Joint Committee of Congress created under the Budget Control Act, and dubbed  would meet later this year, and its recommendations for cuts would be subject to a simple majority vote in the House and Senate. 

Medicaid and Medicare are not expected to be impacted in the first round of cuts, but these two are expected to be targeted by the 12-member committee in subsequent rounds. However, if the super committee fails to cut the deficit by its mandated $1.5 trillion, automatic spending cuts could be triggered and Medicare providers would face reimbursement cuts capped at 2% beginning in 2013.

Last week several hospital chiefs forecasted greater reimbursement cuts than that saying they anticipate closer to 6% or $155 billion over the next 10 years, as do the American Hospital Association and National Nurses United—all of whom have criticized the $2.4 trillion debt ceiling and deficit reduction package. Unquestionably, if that percentage of cut comes to fruition it will be very bad for the healthcare bottom lines. But even before any cuts take place, the simple possibility for cuts of this magnitude is troubling for hospitals and health system credit ratings—and S&P makes no bones about that.

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