Watch out, cuts are coming (to health care)

President Obama presented his budget last week and there are several aspects to the budget that could affect hospitals, especially rural hospitals, if approved by congress.

Here are a few aspects you should be aware of:

1)  Medicare’s bad debt policy could be adjusted to reduce bad debt payments to hospitals from 70% to 25% of eligible charges.  Reduction of bad debt reimbursement to Medicare Dependent hospitals like GVMH will be problematic because of the high amount of bad debt we deal with.

2)  Critical Access Hospital (CAH) payments are proposed to be reduced from 101% of reasonable costs to 100% and Critical Access Designation for CAH’s within 10 miles of one another will be eliminated.  Although GVMH is not a CAH the change could be devastating to several “safety net” hospitals across the state.  Over the past few years many CAH’s were able to improve or replace their facilities because of the cost plus reimbursement.  If reimbursement changes from 101% of cost to 100% of cost many CAH’s will struggle to meet debt obligations.

3)  A major development all hospitals in the State of Missouri will watch closely are proposed changes to states’ use of Medicaid provider taxes.  To make a difficult to understand subject somewhat easy to understand, the State of Missouri charges hospitals a provider tax.  This tax is then used to help fund Medicaid services by taking advantage of matching dollars from the federal governement.  If the governemental match decreases, hospitals in the state will struggle to continue to fund Medicaid and reductions in services are bound to follow.

5)  Don’t forget about the physician pay fix…although it’s not addressed in the President’s proposed budget there is a temporary fix in place but a long term solution must be achieved at some point and it looks like 2013 is a safe bet because no one running for office wants to anger every physician and hospital in the country during an election year.  (there’s a reason the President didn’t address the physician pay fix in his proposed budget, see comments above about this being an ELECTION YEAR)

Keep in mind the budget must be approved by congress and this is an election year so things will surely change.  We need things to change and hopefully we will some day address our issues in health care funding with reason and not political positioning.

About Craig Thompson

I am a young professional with two great sons, and I work in the healthcare setting. I am employed in hospital administration and serve as Chief Operating Officer at Golden Valley Memorial Healthcare in Clinton, Missouri. These are challenging and exciting times in healthcare and my blog will focus on healthcare, raising boys or being raised by boys, and living in mid America.
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