(Long Island, NY) The $1.1 trillion spending plan approved by Congress eases some sequestration cuts to the Pentagon, but provides no similar relief to the nation’s hospitals. Although the bill funds every agency of the government, the level of automatic Medicare sequestration cuts to hospitals remains. The first round of automatic sequestration cuts went into effect last March and the second round of two-percent Medicare sequestration cuts occurred at the start of this year.
In addition, the Budget Conference Committee two-year agreement reached in December 2013, from which the recently approved spending plan appropriates funds to government agencies and departments, also added two more years of sequestration cuts to hospitals (2022 and 2023). These additional hospital cuts partly offset the defense industry’s sequestration relief.
Hospitals were also tapped as a funding source for the temporary “doc fix,” which expires March 31, 2014. The temporary “doc fix” was also approved in December 2013, and this measure averted a 24 percent Medicare pay cut that was scheduled to hit the nation’s doctors on January 1, 2014. Scheduled cuts to Medicare physician payment are the result of the sustainable growth rate (SGR) formula.
Enacted in 1997, this legislation directs physician reimbursement. It is tied to an inflationary factor that economists agree is no longer feasible. As a result, Congress enacts these temporary patches or “doc fixes,” while it works toward a permanent solution. However, any permanent solution brings with it the threat of more cuts to hospitals. Hospital advocates say they will be watching this issue closely.
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.
