Hospital Groups Urge Lawmakers To Prevent Further Reimbursement Cuts

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By Nathaniel Weixel  

Oct. 29 -- A special congressional panel that will look at potential savings shouldn't ask hospitals to make further sacrifices, several hospital industry groups said in an Oct. 28 letter.

Nine national hospital organizations, including the Federation of American Hospitals and the American Hospital Association, sent their letter to the House and Senate budget committees, urging the lawmakers not to further reduce their Medicare and Medicaid reimbursement.

“With total cuts approaching nearly half a trillion over the next ten years, including nearly $45 billion in Medicare sequestration cuts, many local hospitals are nearing a breaking point in their ability to ensure patients have the care they need, when they need it,” the groups said.

Newly appointed House and Senate budget conferees are expected to start budget negotiations Oct. 30, led by House and Senate Budget Committee chairmen Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.).

The short-term agreement to reopen the government called for the creation of a House-Senate conference committee to work out fiscal year 2014 budget recommendations by Dec. 13, before the next round of across-the-board government spending cuts known as the sequester takes effect in January 2014.

“Local hospitals simply cannot meet the needs of the communities we aim to serve if we continue to face these cuts and underpayments,” the groups said in the letter. “We urge you to talk with your local hospitals to discuss the impact of hospital cuts on your constituents.”

Aside from budget considerations, the groups also urged the lawmakers to provide “urgent relief from Medicare sequestration which, if left in place, will continue to interfere with our mission to provide essential care to your communities.”

Fix SGR, Delay DSH Cuts.

In a separate letter to the committee leaders, dated Oct. 25, the Premier healthcare alliance urged the lawmakers to continue making “needed Medicare payment reforms” such as a national bundled payment policy, and a permanent replacement for the sustainable growth rate formula (SGR). Premier also urged lawmakers to delay the scheduled reductions to the Medicare and Medicaid Disproportionate Share Hospital (DSH) programs.

“We urge you to seize this opportunity to address problems that have been too long ignored in our healthcare system,” Premier wrote. “It has never been more important to take action to ensure that patients have access to critical, high-quality and efficient hospital care through the Medicare and Medicaid programs long into the future.”

In calling for a permanent SGR fix, Premier said it supports funding the reform through structural entitlement reforms.

“This should not be funded through additional cuts to healthcare providers,” Premier said in the letter. “Reduced Medicare payments will stymie the significant progress hospitals are making toward transforming healthcare to be better coordinated, higher quality and more efficient. In contrast, reasonable structural changes to Medicare will help put the program on the glide path toward sustainability.”

Premier said lawmakers should also include in any fiscal package the provisions of the bipartisan Disproportionate Share Hospital (DSH) Reduction Relief Act of 2013 (S. 1555, H.R. 1920). The bill would delay the scheduled reductions to the Medicare and Medicaid DSH programs until 2016 to allow states additional time to determine the level of health-care coverage expansion.

“These cuts were levied on hospitals under the premise that they will be offset by reduced uncompensated care through the coverage expansion. Now that the expansion is in question in many states and the exchanges are stalling, more time is needed for the promised expansion to occur,” Premier said.

Additionally, Premier, which was writing for community hospitals and other provider groups, asked lawmakers to “make the complex Medicare system more rational.”

Specifically, they called for a national, voluntary bundled payment program. The program would last three days before a patient enters the hospital and end 30-90 days post-discharge.

Premier said a bundled payment system “will encourage better coordination among providers, payers and patients in an effort to lower healthcare costs and improve quality outcomes. Both Medicare and providers will benefit from such a program by sharing in any savings achieved through high-quality, more efficient care.”

By Nathaniel Weixel  

To contact the reporter on this story: Nathaniel Weixel in Washington at

To contact the editor responsible for this story: Ward Pimley at

The hospitals' is at

The Premier letter is at