Hospital groups protest tighter payment rules

Hospital groups are pushing back against a provision in the pending tax extenders bill they say could slash their Medicare payments by $4.5 billion over 10 years. 

Hospitals fear the provision could forbid them from billing some care administered within 72 hours of a patient’s admission separately from the bill they would send for a patient’s hospital stay, which is less lucrative.

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Democrats say the provision merely closes a loophole in the law that could have allowed hospitals to bill related services separately. They add that most hospitals were already billing them together anyway, so they won't be losing any money.

"This policy protects the Medicare program and seniors simply conforming the law to the way hospitals are already doing business," Finance Chairman Max Baucus (D-Mont.) said in a statement.

Groups representing hospitals point out their industry has already accepted payment cuts under the healthcare law signed by President Barack Obama earlier this year.

“Hospitals have already accepted $155 billion in Medicare and Medicaid cuts through healthcare reform,” Christiane Mitchell, director of federal affairs for the Association of American Medical Colleges, wrote in an e-mail requesting that members contact their members of Congress.

Pending Medicare rules, she adds, suggest additional cuts are coming that would hit teaching hospitals particularly hard.

“We cannot support an additional $4.5 billion in Medicare hospital payment cuts,” Mitchell writes in the e-mail, which was obtained by The Hill. “Please share any feedback you might receive; your input will greatly help in our efforts to block the cuts.”

While several hospital groups have touted the $4.5 billion figure, Democrats have not given a specific estimate of the provision’s cost.

A summary of the pending bill released Thursday by Senate Finance Chairman Max Baucus (D-Mont.) and House Ways and Means Committee Chairman Sandy Levin (D-Mich.) says the Congressional Budget Office is still estimating the provision’s savings to Medicare.

“The bill would … [prevent] future unbundling of services and submission of adjustment claims seeking separate and additional Medicare payments,” the summary says.

The bill is expected to come before the House Rules Committee on Monday and hit the House floor by Tuesday. Lawmakers want to pass it before the Memorial Day recess because it affects a number of expiring provisions, but its support in the Senate remains shaky.

Many deficit-wary members are concerned that some three-quarters of the package may be unpaid for. The cuts to hospital payments would help pay for the bill.

The American Hospital Association has also weighed in against the measure.

“We oppose inclusion of this provision in the jobs bill to reduce further hospital reimbursement,” the group wrote in an action alert to its members sent Thursday morning.