Archive for Medicare cuts

 

CBO Targets Health Care in Options for Reducing Deficit

Every year the Congressional Budget Office publishes a menu of options for reducing federal spending and the federal budget deficit.  As in the past, this year’s compendium includes a number of options to reduce federal health care spending and raises federal revenue through health care initiatives.

The cost-cutting options include:

  • establish caps on federal spending for Medicaid
  • limit states’ taxes on health care providers
  • reduce federal Medicaid matching rates
  • change the cost-sharing rules for Medicare and restrict Medigap insurance
  • raise the age of eligibility for Medicare to 67
  • reduce Medicare’s coverage of bad debt
  • consolidate and reduce federal payments for graduate medical education at teaching hospitals
  • use an alternative measure of inflation to index social security and other mandatory programs

Options to raise additional revenue include:

  • increase premiums for Parts B and D of Medicare
  • reduce tax subsidies for employment-based health insurance
  • increase the payroll tax rate for Medicare hospital insurance

Learn more about the CBO’s recommendations, how they might be implemented, and their potential implications in the CBO report Options for Reducing the Deficit: 2019 to 2028.

Hospital Government Payment Losses Could Reach $218 Billion by 2028

A recent study concluded that hospitals can expect to lose about $218 billion in federal Medicare and Medicaid payments between 2010, when the latest round of major cuts began, and 2028.

Among those cuts cited in the study, which was commissioned by the American Hospital Association and the Federation of American Hospitals, are:

  • $79 billion for DRG documentation and coding adjustments
  • $73 billion for Medicare sequestration
  • $26 billion for Medicaid disproportionate share payments (Medicaid DSH)
  • $11 billion in cuts associated with the American Taxpayer Relief Act of 2012

Other cuts came, or will be coming, through regulatory changes, the introduction of value-based payment programs, and other means.

Learn more about these cuts and their potential implications in this Healthcare Dive story.

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Safety-Net Hospitals Under the Gun

Safety-net hospitals across the country face a new challenge:  adjusting to several cuts in the supplemental payments they receive from the federal government to help them serve the low-income residents of the communities in which they are located.

First there is a $2 billion cut in Medicaid disproportionate share hospital payments (Medicaid DSH).  These are payments made to hospitals that serve especially large numbers of low-income patients.  These payments help safety-net hospitals with the unreimbursed expenses they incur caring for such patients.  This cut, mandated by the Affordable Care Act but twice delayed by Congress, took effect on January 1.  In many states the value of Medicaid DSH cuts will exceed the reductions in uninsured care that hospitals have experienced since the Affordable Care Act made health insurance more widely available.

Second there is a 28 percent cut in Medicare payments for prescription drugs dispensed through the section 340B prescription drug discount program.  This cut, too, took effect on January 1.

Finally, federal funding has lapsed for the Children’s Health Insurance Program (CHIP) and for community health centers.

Safety-net hospitals are considering a number of moves to offset these losses.  Among them:  reducing or eliminating services, laying off staff, discontinuing …

House to Set Sights on Medicare, Medicaid Cuts in 2018

The House of Representatives will pursue entitlement spending cuts next year, House Speaker Paul Ryan recently explained on a radio program.

That means Medicare, Medicaid, and possibly even Social Security.

Ryan said that

We’re going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit… Frankly, it’s the health care entitlements that are the big drivers of our debt, so we spend more time on the health care entitlements — because that’s really where the problem lies, fiscally speaking.

Learn more about Ryan’s remarks, the administration’s priorities, and what other members of Congress are saying about entitlement cuts in this Washington Post story.…

340B Changes Would Hurt Hospital Margins

Proposed changes in the federal section 340B prescription drug discount program would hurt hospital margins.

So says Moody’s Investors Service, the credit rating agency.

According to Moody’s, the margins of non-profit hospitals are already under pressure because revenue increases are not keeping pace with prescription drug costs.  Reductions of payments under the 340B program recently proposed by the Centers for Medicare & Medicaid Services would make a challenging situation worse, Moody’s speculates.

Under the 340B program, eligible hospitals purchase prescription drugs at a discount, supply them to eligible outpatients, and use the savings they gain to provide additional services and outreach to the low-income residents of their communities.

Skeptics maintain that hospitals simply pocket the savings.

Under the regulation proposed by CMS, federal payments to 340B-eligible hospitals would be greatly reduced.

Learn more about the issue and Moody’s report on the potential impact of changes in the program in this Healthcare Finance News article.…