Hospitals Pay For ‘Doc Fix’ in ‘Fiscal Cliff’ Bill

By  //  January 3, 2013

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(VIDEO: ElsGlobalMedicalNews)

EDITOR’S NOTE:–The “Fiscal Cliff” legislation passed in the eleventh hour on Tuesday by Congress included a postponement of a scheduled Medicare physician reimbursement cut of 26.5% mandated by the Medicare Sustainable Growth Rate (SGR) formula.  Pushing the “cut” out another year surely averted a wholesale exodus of physicians out of the Medicare program at a time when it is crucial to have “all hands on deck” to meet the ever-increasing healthcare resource needs of our aging population.

Unfortunately, as reported in the Kaiser Health News article excerpted below, the bill places the burden of providing a substantial amount of the dollars to pay for the nearly $30 billion SGR physician patch squarely on hospitals, which will have baseline payments and a variety of other risk-adjusted payments for hospital services significantly lowered, and, according to many in the hospital industry, will jeopardize hospitals’ ability to care for seniors and their communities.

KAISER HEALTH NEWS–Legislation passed by Congress New Year’s Day to avert the dreaded “fiscal cliff” would stop a scheduled payment cut in Medicare physician payments. But hospitals, which have to bear a major part of financing for that “doc fix,” are not happy.

‘Fiscal Cliff’ legislation ‘Takes from Peter to pay Paul.’

The bill would require that, over the next decade, hospitals pick up nearly half of the approximately $30 billion cost of stopping a 26.5 percent payment cut for Medicare physicians, scheduled to begin today.

The 26.5 percent reduction for doctors comes from a payment formula created in a 1997 deficit reduction law. For the first few years, doctors received modest pay increases. But in 2002, doctors reacted with fury when they came in for a 4.8 percent pay cut under that plan. Every year since, Congress has staved off the scheduled cuts.

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