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TagsNew Jersey's hospitals could be forced to shoulder an additional $120 million in Medicare cuts next year under a federal budget proposal.
The 2011 federal fiscal year begins Oct. 1. Each year, the U.S. Centers for Medicare and Medicaid Services issues a proposed rule in the spring to indicate Medicare reimbursement changes pending for the new fiscal year. This year's proposed rule for inpatient hospital care calls for a 2.9 percent cut in hospital payment rates, plus a 2.9 percent reduction in capital funding for hospitals. The net result for New Jersey is a proposed $120 million cut in Medicare payments.
The looming cut is grim news for hospitals and their patients. New Jersey hospitals are already slated to lose $4.5 billion in federal funds over the next 10 years in the sweeping healthcare reform law. Plus, Medicare currently pays New Jersey hospitals at a rate of just 91 percent of their costs for caring for the state's senior citizens. The proposed cuts for 2011 will further undercut those already inadequate rates.
"In football parlance, the Medicare payment proposal for next year is the equivalent of ‘piling on,'" said NJHA President and CEO Betsy Ryan. "The nation's hospitals agreed to shoulder a total of $154 billion in Medicare cuts as part of a shared solution under the healthcare reform law. They ‘took one for the team,' and now are being rewarded with even deeper cuts."The healthcare reform cuts are sealed in law, but the proposed rate cuts for 2011 must still be approved by CMS. NJHA is airing its concerns directly with CMS and also is working closely with members of the state’s congressional delegation to encourage CMS to amend the proposal and blunt the impact on hospitals. The N.J. hospital community’s financial woes have been well-documented: 10 New Jersey hospitals have closed in the last five years, and six have filed for bankruptcy. Of the 73 acute care hospitals that remain in the state, about 40 percent are losing money.
"Additional cuts could force struggling hospitals to cut services or close altogether, further eroding access to healthcare services for the state's residents," said Ryan.— ANDY LAGOMARSINO, NEWJERSEYNEWSROOM.COM
Over the course of three years, Berman’s lobbying firm was paid $660,000 to lobby on behalf of UnitedHealth subsidiary Americhoice, a managed care HMO providing health insurance to Medicaid, Medicare, and SCHIP recipients. Specifically, according to the lobbying report, they lobbied on Medicaid issues in the Deficit Reduction Act of 2005. [Americhoice Lobbying Reports 2004 – 2007; Americhoice.com] Berman Also Lobbied For “Absurdly Low” Rates for Medicaid Managed Care Companies to Pay Out of Network Hospitals. Also included in the DRA, and mentioned as a lobbying issue on Berman’s Americhoice lobbying report, was a provision setting rates managed care companies must pay to out-of-network providers -- mainly hospital emergency rooms -- for care received by Medicaid beneficiaries. Rather than forcing managed care companies to reimburse out-of-network hospitals an amount comparable to network providers, the legislation set the default amount to the state’s “fee-for-service rate,” which often is “absurdly low.” The provision thereby shifted financial responsibility for services to Medicaid beneficiaries from the managed care companies to the hospitals themselves, permitting managed care companies to rake in huge profits, while hospitals incurred added losses. [Modern Healthcare, 1/29/07; Text of S. 1932] To Save Money, Bill Cut Services to Medicaid Beneficiaries, But Left Managed Care Providers Untouched. Under the final budget package, substantial Medicaid spending cuts were achieved by imposing new premiums and increased co-payments on Medicaid beneficiaries; some costs were also shifted to the states, who in return were awarded new powers to drop coverage or reduce benefits to certain beneficiaries. In a letter to Senate Majority Leader Bill Frist, the AARP CEO decried the final bill, saying it “protects the pharmaceutical industry, the managed-care industry and other providers at the expense of low-income Medicaid beneficiaries.” [Inside CMS, 12/29/05; Los Angeles Times, 12/22/05; World Markets Analysis, 12/21/05; The Hill, 12/20/05]