Leap Year Negotiations


As 2011 came to a close, the House and Senate passed a two-month extension of the Social Security (SS) payroll tax holiday and emergency Unemployment Insurance (UI) benefits and a two-month fix on the current Medicare physician payment rates.

What will happen in February? We hope the appointed conferees and other congressional leaders realize that hospitals have stepped forward with $155 billion in expense reductions (already agreed to cuts). However, during the December negotiations, some suggested the following:

  • Reductions in payments to hospitals for assistance to low-income Medicare beneficiaries (bad debt).  This is a repeat of the Balanced Budget Act of 1997 when Medicare bad debt was targeted for significant reductions. In the Benefits and Protection Act of 2000, Congress restored and increased the reimbursement for Medicare bad debts when the negative consequences of cutting payments to the poor and most vulnerable beneficiaries became evident.
  • Reductions in payments for Evaluation and Management (E/M) services provided in hospital outpatient departments.
  • Extending the current cap on therapy services.
  • Provide the Center for Medicare and Medicaid Services (CMS) new authority to make additional across-the-board cuts to Medicare inpatient hospital rates through the use of retrospective coding adjustments for fiscal years 2010, 2011 and 2012.
  • Reduction in Graduate Medical Education (GME) Payments to teaching hospitals.

These are serious, critical issues and may well be on the table during February deliberations.  Since this is an election year, this February discussion may be the only time legislators will address Medicare issues. We need our legislative leaders to take a “leap of faith” during this leap year and work cooperatively, collaboratively and constructively to address our budget shortfalls without reducing hospital Medicare reimbursement further.  The $155 billion in commitments is certainly enough. We have contributed our fair share.