Home > Hospital and Medical Practice Management > U.S. Debt Committee Proposes 20-30% Cuts to Medicare and Medicaid

U.S. Debt Committee Proposes 20-30% Cuts to Medicare and Medicaid

The U.S. Congressional Joint Committee on Deficit Reduction has proposed a 20-30% combined cut to Medicare/Medicaid. The committee specifically plans to cut $300 billion from Medicare/Medicaid over the next 10 years. Senators on the U.S. Senate Finance Committee have said that the cuts are necessary and have to be done to get rid of all of the fraud committed by UnitedHealthcare, Humana, Cigna, Aetna, and Blue Cross/Blue Shield. Even if the Committee fails to reach a deal next week, automatic 2% cuts to Medicare/Medicaid will still have a major affect on physician practices and hospitals. Tennessee Hospital Association CEO Craig Becker says “if you’re looking at a 2o percent to 30 percent cut in medicare and medicaid funding, there’s no way some of them can take that.” Mr. Becker is absolutely right. Non-profit facilities will suffer and for-profits will suffer just as much. Tenet has publicly said that the sequestration would result in a $40-$54 million loss on EBITDA (cash flow). United Health Systems has said sequestration would reduce EBITDA  by $36.6 million over the next year. For insurers, they are expecting an impact as well. Even though they are being investigated by the U.S. Senate and DOJ for fraud, they plan to use the cuts as an opportunity to continue their attack on physician reimbursement. UnitedHealthcare, Humana, Aetna, Cigna, Blue Cross/Blue Shield specifically plan to withhold as much reimbursement as possible from physicians in order to preserve profits for their shareholders as a result of the cuts.

In addition, CMS plans to cut physician reimbursement by an additional 27.4% starting January 2012. In October of 2012, CMS will also withhold reimbursement for those physicians and hospitals who have “poor” patient satisfaction survey scores (HCAHPS).

Source: http://www.cnbc.com/id/45325955

Source: http://cms.gov/

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