Hospitalists Spared Reduced Medicare Reimbursement Rates … For Now


The short-term compromise congressional leaders reached earlier this month on Draconian cuts to Medicare payments can only be viewed as a good thing for hospital medicine, says the head of SHM's Public Policy Committee. However, the fight is far from over.

"Just like everything else they've been doing, they're kicking the can down the road,” says committee chair Ron Greeno, MD, FCCP, MHM. "At least they kicked it a year this time, so that gives us a little bit of breathing room in terms of our physician practices being able to plan."

The American Taxpayer Relief Act of 2012 averts a 26.5% cut to Medicare payment rates and extends the current Medicare physician fee schedule through the end of this year. The downside is the one-year delay is to be paid for "largely through adjustments to payments for hospitals and non-physician providers, and reductions in Medicaid disproportionate share hospital payments," according to a report from SHM issued earlier this month.

Dr. Greeno agrees that by reducing hospital revenue, the compromise puts additional fiscal pressures on HM groups, but that is the reality of the political logjam in Washington. Still, SHM will continue to lobby for a long-term answer.

The decision has drawn criticism from hospital trade associations. Chip Kahn, president and CEO of the Federation of American Hospitals (FAH), described it as a plan to "rob hospital Peter to pay for fiscal cliff Paul." [PDF]

"This is all just another patch," Dr. Greeno says, "and it doesn't create the solution that everybody is looking for, which is basically repeal of the SGR and replacing it with something that creates the incentives needed to engage physicians in improving the healthcare system."

The compromise also does not address the budget sequester, which was delayed until the end of March. Without action on that front, SHM says providers will lose 2% from their Medicare payments. The sequestration also would reduce funding dedicated to medical research.

Visit our website for more information about efforts to repeal the SGR.

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