Medicare Reimbursement Rates Slashed for Hospitals: Medicaid to Follow

This blog is dedicated to North Carolina Medicaid.  However, per Obamacare, in the future, the Medicaid reimbursements rates will be in direct correlation to the federal Medicare reimbursement rates.  Therefore, Medicare reimbursement rates are important to Medicaid.

Earlier this month, Congress was forced to tangle with the “fiscal cliff.”  I’m sure everyone, as well as myself, is grateful, mostly because we were sick of hearing the term, “fiscal cliff.”

A lesser-known component of Congress’ fiscal cliff avoidance is that Congress, once again, thwarted the annual threat of Medicare reimbursement rates to physicians getting cut by 26.5%.  Of course, per Congress’ normal course of business, the avoided rate cut  is only a temporary fix.  Next year, again, we will be faced with the same threat.  Since 2003, annually, Congress must decide whether to allow the Medicare reimbursement rates to physicians to be reduced.  So far, every year, Congress has prevented the Medicare reimbursement rates to be slashed. So why not pass legislation that puts an end to the annual debacle? I, for one, actually thought this year Congress may do just that while they were tangling with the fiscal cliff.  But no such luck.

If you have been following my blog, or read any of my past blogs, then you know that I am a huge advocate of higher reimbursement rates for physicians who accept Medicaid.  Not enough physicians accept Medicaid for the number of Medicaid recipients. Medicaid recipients have the right to receive quality medical health care. With the Medicaid reimbursement rates so low, many physicians refuse to accept Medicaid patients, and those that do accept Medicaid often refuse to run expensive tests due to the Medicaid reimbursement rate.

With that said, Congress thwarting the Medicare rate reduction again this year is a good thing. Reimbursement rates need to increase, not decrease.

However, let’s not cheer on Congress too much for their temporary fix on not reducing the Medicare reimburse rates.  Remember, I said that the reduction rate this year was supposed to be 26.5%.

How much did this temporary hold on Medicare reimbursements rates cost? According to federal budget officials, the cost of stopping the 2013 Medicare physician payment reduction is $7 billion for a one-year pay patch.


So…Yay for the temporary hold on Medicare reimbursement rates….But, where did the $7 billion come from?

Quick evaluation of necessary services for Medicaid recipients:

1. Physicians accepting Medicaid

2. Hospitals accepting Medicaid

Think about it. If a Medicaid recipient cannot locate a physician accepting Medicaid, the recipient has little choice but to check in at the local emergency room. Hospitals ERs, sadly, become the Medicaid recipients’ primary care doctor in the absence of one accepting Medicaid. (Didn’t you wonder why it takes 5 hours to be seen at the ER?)

Back to the $7 billion:

U.S. hospitals will be footing most of the bill for $7 billion.  While Congress averted the fiscal cliff and a slash to Medicare reimbursement rates, Congress slashed the Medicare reimbursement rate to hospitals.  The legislation cuts Medicare payments to hospitals for taking care of patients overnight and as inpatients to the tune of about $10.5 billion over 10 years. It also reduces subsidies for  some pharmacies and some dialysis facilities.

Hmmmmm…so, by maintaining the status quo on Medicare reimbursements to physicians, hospitals that accept Medicare will suffer?

Why this makes zero sense: By maintaining status quo with physicians accepting Medicare, we are not increasing the number of physicians who accept Medicare. We are maintaining the number.  If you agree with me that we desperately need more physicians accepting Medicare/caid, then maintaining status quo is not good enough. Plus, by understanding the Medicaid/care’s reliance on hospitals in light of few physicians accepting Medicare/caid, you understand that crippling hospitals accepting Medicare/caid is the opposite of what is needed by the Medicare/caid population. Congress essentially robbed Peter to pay Paul.

At some point, government officials are going to need to decide that Medicaid is important enough to really fix. When that happens, officials will realize that reimbursement rates need to be at a level which cause physicians and hospitals to opt to treat Medicaid recipients. Maintaining the current reimbursement rates is not acceptable.  Neither is decreasing reimbursement rates to some health care providers to stop a decrease in reimbursement rates to another type of health care provider. If the Medicaid rates are tied to Medicare’s rates, then, obviously, we need to increase reimbursement rates to both.

I understand increasing the Medicaid reimbursement rates would be costly. But isn’t it also costly for North Carolina to have millions of Medicaid recipients without proper health care? With no physician who will accept Medicaid? And visiting the costly ER for services that a primary care physician could handle?  Maybe the answer is that today’s Medicaid program is antiquated. Medicaid was created in 1965 with millions less Americans taking part in it. Maybe the Medicaid system was not created with the foresight of the number of Americans who would rely on it for medical insurance. Maybe 57 years after creation, we need to completely revamp the Medicaid system. I wonder whether a politician would ever have the guts to revamp the entire Medicaid system. And would he or she ever get elected????


About kemanuel

Medicare and Medicaid Regulatory Compliance Litigator

Posted on January 14, 2013, in Affordable Care Act, Congress, Health Care Providers and Services, Legislation, Medicaid, Medicaid Funds, Medicaid Reimbursement, Medicare, North Carolina, Obamacare, Primary Care Physicians and tagged , , , , , , , . Bookmark the permalink. Leave a comment.

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