Clipboard: ‘Doc fix’ will mean cuts for hospitals

Doctors will not see a 27 percent cut to Medicare payments this year. The fiscal cliff deal passed by Congress Tuesday includes a one-year delay on automatic reductions in Medicare spending that have been put off for a decade. But the fix is not free. Other areas of health care, primarily hospitals, will pay for it.

Mary Agnes Carey reports on the Kaiser Health News blog that the bill also would adjust payments for end-stage renal disease to save about $5 billion and reduce risk-adjusted payments to Medicare Advantage plans to save $2 billion. Lower payments to hospitals would account for about half of the $25 billion to $30 billion cost of the so-called “doc fix.” She writes:

The package would reduce hospital payments in two ways. First, it would cut $10.5 billion from projected Medicare hospital payments over 10 years for inpatient or overnight care through a downward adjustment in annual base payment increases. The Senate measure also would reduce Medicaid disproportionate share payments to hospitals by an additional $4.2 billion over the next decade. These cuts are on top of those made to hospitals as part of the 2010 health care law.

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Groups representing hospitals said the new plans for reductions will hurt their ability to care for patients.

“While fixing the physician payment formula is essential, it should not be done by jeopardizing hospitals’ ability to care for seniors and their communities,” Rich Umbdenstock, president and chief executive officer of the American Hospital Association, said in a written statement.

Robert Pear of the New York Times reports that the deal also formally repeals an insurance program for long-term disability care that had been backed by Senator Edward M. Kennedy and was part of the Affordable Care Act. The Obama administration gave up on the program in 2011 because it could not make the initiative self-sustaining.