Hospital group slams budget deal over cuts

Hospital group slams budget deal over cuts
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A leading U.S. hospital coalition is opposing the two-year budget deal working its way through Congress because of its cuts, which the group says balance the budget “on the backs of patients.”


The American Hospital Association said in a statement Tuesday that it is opposing the bipartisan deal because of a section cutting certain future payments to hospitals. 

The section in question deals with the issue of hospitals acquiring doctors’ offices and then getting paid more under Medicare by classifying them as “outpatient hospital departments.” The budget deal would limit future payments by preventing facilities acquired in the future from upgrading to the higher payment status. The Congressional Budget Office estimates the savings at $9.3 billion over ten years. 

“This untested idea may endanger patient access to care, especially among patients who are sicker, the poor, minorities and seniors who often receive care in hospital outpatient departments,” said Thomas Nickels, AHA’s executive vice president. 

He called for the provision to be taken out of the deal, adding “Congress and the Administration should not balance the budget on the backs of patients.”

AHA also objects that the budget deal cuts payments to healthcare providers by extending the 2 percent sequester cuts to Medicare by one year, to 2025. But other than those cuts, many other healthcare industry groups were spared and have not voiced opposition.  

Even another hospital group, the Federation of American Hospitals, which represents specifically for-profit hospitals, offered measured support for the bill. 

Chip Kahn, FAH’s president and CEO, said in an interview that with so many budget deadlines looming, they knew congressional leaders would need to look for offsets somewhere. 

“We are always opposed to arbitrary payment reductions,” Kahn said. “On the other hand the reality is the reality and we sort of understood something was going to happen.”

He said congressional leaders “dealt with it the best way they could.”

There is also hope for hospitals that the change will stave off more sweeping reforms in the realm of what are known as “site neutral” payments. Those further reforms, proposed by President Obama in his budget, would more drastically lower payments to hospital outpatient centers to bring them in line with doctors’ office payments. 

Kahn said the new provision means that with luck lawmakers “will not spend any more time” on the issue. 

Separately, the budget deal widens the requirement that drug companies pay a rebate to Medicaid when their prices rise faster than inflation. That requirement did only apply to brand-name drugs, but it is now being extended to cheaper generic drugs, for a savings of $1 billion over ten years. 

Chip Davis, president and CEO of the Generic Pharmaceutical Association, said in a statement that the deal seeks to “balance the budget on the backs of America’s vulnerable Medicaid population.” He said the proposal could limit access to cheaper generic drugs. 

Liberals like Sen. Bernie SandersBernie SandersTrump preps conspiracy theory to explain faltering economy Sanders doubles down on 'Medicare For All' defense: 'We have not changed one word' Sanders, Warren back major shift to fight drug overdoses MORE (I-Vt.) and Rep. Elijah Cummings (D-Md.), however, have championed the change as offering relief from rising generic drug prices. 

On the beneficiary side, AARP is praising the deal for averting 52 percent premium increases for some Medicare enrollees. This change is paid for over time through adding a $3 monthly charge to premiums.