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Hospital Ads Suggest Medicare Reimbursement Cuts Will Hurt Care Quality

Cheryl Clark, July 13, 2010

The hospitals' petition received support Monday in a letter sent by 240 members of the U.S. House of Representatives to new CMS head Donald Berwick.

"The coding 'offset' assumes that hospital payments have increased solely due to changes in coding, or classification of patients, as opposed to hospitals' treatment of more complex an more severely ill patients," the Congressmen wrote.

"We believe that this assertion fails to take into consideration that hospital patients are indeed sicker. Increasingly, as more patients are successfully cared for in hospital outpatient departments, hospitals are reporting that those who are actually admitted to the inpatient setting are often times more severely ill."

Steinberg says that the cut comes at a terrible time. Not only does it wipe out a 2.4% market basket update for hospitals that submit data on quality measures, but it comes on top of hospitals' agreeing to another $155 billion cuts over the next 10 years to help pay for healthcare for the poor under health reform.

And it will hit all hospitals that take care of Medicare patients except for those classified as critical access, with fewer than 25 beds, by reducing the amount of a hospital's base payment that applies to every Medicare patient.

The letter signed by members of Congress adds "The Medicare Payment Advisory Commission (MEDPAC) analysis has shown that hospitals are being paid substantially les than the cost of delivering care to Medicare patients. These costs include wages and benefits (nearly 70% of hospital costs,) medical supplies, pharmaceuticals, medical devices, food and utilities."

It closes:

"A cut of this size in FY 2011 payments to hospitals could weaken their ability to provide high quality services tot heir patients and communities."

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