Patient severity should be taken into account, but who's going to come up with a methodology that all parties agree with? And how long will that take?
Time is of the essence. The letter estimates that if the cuts are enacted beginning in 2011, as scheduled, hospitals will be out an estimated $3.7 billion compared with this year.
When even MedPAC itself estimates that hospitals are already being paid 5.9% less than the cost of care for Medicare beneficiaries, hospitals are understandably nervous about any further reduction in their revenues—especially because healthcare reform legislation seems to promise more of hospitals' revenue streams will depend on government reimbursement, which doesn't cover the true cost of care.
This is a first skirmish between hospitals and the new head of CMS. Despite his experience as the chief executive of the Institute for Healthcare Improvement, Don Berwick is an unknown quantity as the administrator of the largest payer in the land. It will be interesting to see whether he's prepared to do an end-run around the very members of Congress who can go behind his back and provide more funding for hospitals. Will "my patients are sicker" resound with him?