Hospitals Face Dramatic Cuts in Medicare Reimbursement

Quoting an article today in a Modern Healthcare article, "Hospitals may have gotten a reprieve after a bipartisan fiscal commission did not get the 14 votes required to send Congress an ambitious debt-reduction proposal including billions in healthcare cuts, but they're still anxious that parts of the report could be used in future budget plans.
“On the one hand, we were certainly pleased they didn't get the 14 votes necessary,” said Tom Nickels, senior vice president of policy for federal relations at the American Hospital Association. "On the other hand, it's still disturbing that 11 members of the commission were willing to embrace these policies that we think could be harmful to healthcare."
 
If the recommendations are approved, here are some of the implications:
Both Direct and Indirect Graduate Medical Education payments would be reduced, at a time when there is a need for more primary care physicians to ensure access to healthcare.
 
Bad debt reimbursement, which partially covers beneficiaries' unpaid copayments and deductibles, would be eliminated over time. This at a time when the economy has high unemployment and hospitals are struggling to provide care to the uninsured and underinsured.
 
Implementing medical malpractice reform ( a good thing), but removing a requirement that punitive and non-economic damages be capped.
 
Freezing the physician payment formula through 2013 and providing a 1% cut in 2014.
 
There-'s more, but suffice to say the Commission's final report estimates total healthcare savings from their recommendations would be $417 billion through 2020. That's $40 billion a year, or an 8% reduction in annual Medicare and Medicaid expenditures.
 
Hospitals have dodged a bullet for now, but it appears certain more cuts are on the way. As senior managers of healthcare institutions, we can't throw up our hands and shut the lights. We'll have to find new ways to meet the challenges of this reimbursement environment. Maybe we'll be able to successfully implement Accountable Care Organizations, bundled payments and other delivery schemes. Maybe we'll be able to implement Electronic Health Records that meet "meaningful use" standards, to facilitate reimbursement for IT investments. And maybe these actions will reduce our healthcare delivery costs while improving quality. MAYBE?