Health industry fears double whammy in Medicare cuts

If passed, the debt-ceiling bill would establish a bicameral 12-member committee in Congress to search for an additional $1.5 trillion in deficit cuts.

Medicare will be on the table in the joint committee’s work. If a plan produced by the committee is voted down in Congress, for whatever reason, it would trigger automatic across-the-board reductions that would cut up to 2 percent of Medicare’s total spending. Either way, Medicare payments to doctors and hospitals are likely to be slashed.

The double whammy for the health industry could come at the end of the year, when the latest short-term patch to Medicare physician payment rates is set to expire. Current law calls for an ever increasing cut to doctors’ payment rates, and Congress passes short-term fixes to delay the cut. Pushing it off for another year would cost about $25 billion, though providers had been pressing for a two-year fix at a cost of roughly $50 billion.
Andrea Bergman, a senior director with McDermott Will & Emery, said health lobbyists are trying to figure out how to make their case to the joint committee — and remind its members that, with the so-called “doc fix” still looming, their Medicare cuts won’t come in a vacuum.
Good-faith negotiations over one measure can be negated once another bill comes along and “they forget that they just gouged you,” she said.
Lobbyists say hospitals are the most at-risk group of healthcare providers. Some hospitals — such as rural facilities and those that rely disproportionately on Medicare — receive bonus payments that could make an easy target.

Hospitals have been arguing throughout the debt negotiations that they’ve already given enough, mostly through cuts in the healthcare reform law.
“America’s hospitals find it difficult to support a debt ceiling proposal that could negatively affect Medicare for our nation’s seniors,” the American Hospital Association said in a statement. “Hospitals have repeatedly demonstrated a willingness to accept shared sacrifice and do what is best for our country, but our first commitment is to patients, whose access to care could be curtailed by further cuts to Medicare funding for hospital care.”