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Fiscal Cliff Stopgap Delays 'Doc Fix,' but Hits Hospitals

John Commins, for HealthLeaders Media, January 3, 2013

"However, a greater bipartisan effort is still needed in the coming year to approve legislation that permanently repeals once and for all the flawed SGR formula, and transitions to payment models that provide predictable annual updates to physicians participating in Medicare, while being aligned with the provision of high quality and efficient care." 

The $25.2 billion cost of extending the SGR over the next 10 years will come primarily at the expense of hospitals and other providers—including some subspecialists—in the form of Medicare "offsets."

Impact on Hospitals
The largest hits for hospitals will include: an "adjustment" in the Inpatient Acute Care Hospital Documentation and Coding, which is expected to save about $10.5 billion over 10 years, starting in 2014; reduced bundled payments for end-stage renal disease, which is expected to save about $4.9 billion, starting in 2014; and a further reduction from 25% to 50% for therapy multiple procedure payments, with savings of $1.8 billion over 10 years, starting April 1.

The general perception of the Relief Act is that hospitals were the big losers. That perception was not diminished with American Hospital Association President/CEO Rich Umbdenstock's complaint that fixing the SGR "should not be done by jeopardizing hospitals' ability to care for seniors in their communities."

"That's why we are very disappointed at the approach taken in this measure," Umbdenstock said in prepared remarks. "Additional payment reductions will make it harder for patients to access the care they need and depend on."

Umbdenstock said the AHA will continue to work with Congress to "find a permanent solution to the Medicare physician payment problem, while remaining vigilant against additional cuts that could be harmful to hospitals' ability to fulfill their mission of caring."

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1 comments on "Fiscal Cliff Stopgap Delays 'Doc Fix,' but Hits Hospitals"


flpoggio (1/3/2013 at 5:47 PM)
Robbing Peter to pay Paul...now that's a unique way to get doctors and hospitals to work closer together. While one federal agency is spending billions to promote and reward ACOs another is driving a wedge between them. Does that sounds like a winning startegy?