Federal budget deal targets Medicare payments, and that means Kentucky hospitals won’t be happy

Looking for a way to localize the budget deal announced by congressional negotiators last night? Call up your local hospital.

David Rogers of Politico reports that hospitals are “furious with the fact that the deal offers no
relief from future cuts on Medicare providers – and even extends these
annual 2 percent reductions into 2022 and 2023.” The cuts would be a continuation of those imposed by the “sequester” legislation that took effect when Congress failed to reach an anticipated deal on the federal deficit and taxes.

The $28 billion extension of the cuts, almost a third of the $85 billion total, “helps to dress up the package with tens of billions in savings, but at a time when hospital networks are already feeling the impact of health-care reform, there is a fear that Congress is not seeing the long term impact of these budget assumptions,” Rogers writes.

Most rural hospitals are already facing Medicare cuts because reform law reduces the extra payments made to hospitals that have large percentages of Medicare patients. Those hospitals are disproportionately rural.

The deal also includes “a provision that aims to prevent fraud and abuse in the Medicaid program for the poor and disabled,” Modern Healthcare reports. “According
to a summary, the provision allows states to delay paying for suspect
claims as long as the delay does not harm a beneficiary’s access to
care. It also would allow states to collect medical child support in
cases where health insurance is available from a non-custodial parent
and allows Medicaid to recoup costs from beneficiary-liability
settlements.”

Why cut Medicare payments? “Congressional staffers were not prepared to talk about the cuts on the
record, but said it boiled down to Medicare providers being the
least painful target. Democrats, they noted, have not traditionally been
strong supporters of preserving the payments to providers, being much
more concerned with maintaining funds for beneficiaries. Republicans saw
extending for two years cuts that are already in the law for mandatory
programs as a simple way to add deficit reduction to the replacement of
sequestration for discretionary programs,” Michael McAuliff reports on The Huffington Post.

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