(Long Island, NY) Extending the two-percent annual Medicare sequestration cuts to hospitals has become a convenient way to pay for the reversal of cuts imposed on other sectors and also as a funding mechanism to avoid proposed cuts on any particular sector.
This past week this scenario played out once again as Congress, as part of its debt ceiling extension, approved an additional year of Medicare sequestration cuts, into 2024, to restore funding to military pensions. In December 2013, lawmakers approved a budget deal to fund the government through September 30, 2014 and part of that deal included cuts to cost-of-living increases for younger military retirees – a very unpopular provision. This latest Medicare sequestration cut will cost New York hospitals and health systems $280 million in new Medicare cuts atop the more than $2.6 billion in Medicare sequestration cuts already in law.
The expiration of the temporary “doc fix” on March 31, 2014 means hospitals are extremely vulnerable to more Medicare cuts, as Congress looks for ways to either fix this perennial funding problem or once again delays the onset of this massive physician Medicare pay cut (24 percent). As recently as December 2013, Congress extended Medicare sequestration cuts and deepened the cuts tied to the Affordable Care Act (ACA) disproportionate share (DSH) payments to hospitals. DSH payments help hospitals offset part of the cost of care for the uninsured. The ‘doc fix” refers to the situation Congress and the nation’s physicians find themselves in when Medicare physician reimbursement is set to readjust based on the sustainable growth rate (SGR) formula. Enacted in 1997, the SGR formula directs Medicare physician reimbursement. It is tied to an inflationary factor economists agree is no longer feasible.
Published bi-monthly by the Suburban Hospital Alliance of New York State, LLC, a consortium of 51 not-for-profit and public hospitals advocating for better health care policy for all those living and working in the nine counties north and east of New York City.
