MedeAnalytics, a leading provider of healthcare performance management solutions, today released an estimate of the impact on Medicare payments to hospitals by recently enacted debt-ceiling legislation. Bottom line: over the next 10 years, individual hospitals could see Medicare payments reduced by $1.1 to $1.4 million per year.
"The debt-ceiling deal signed into law by President Obama on August 2 tasks a 12-person joint select congressional committee to come up with $1.2 to $1.5 trillion in deficit reduction by November 23," notes Ken Perez, director of MedeAnalytics' healthcare policy team and the company's senior vice president of marketing. "One important question is how much of the axe will fall on Medicare."
"As a starting point and preliminary analytical exercise, if one assumes that Medicare will bear its proportional share of the budget reductions, $150 to $200 billion in cuts to Medicare could be expected over the 10 years," continues Perez. "If one further assumes that 100 percent of the cuts will be covered by reduced reimbursements to providers (currently a more politically popular approach than reducing Medicare benefits) and that the Inpatient Prospective Payment System (IPPS) would bear its proportional share of the cuts, we estimate that the IPPS would be cut by $50 to $65 billion over the 10 years. That would translate into a cut of $1.1 to $1.4 million per hospital per year."
"There is a lot of speculation right now about the financial fallout from this debt-ceiling legislation," says Perez. "By providing our estimate, based on the best available data, we believe we're contributing to the conversation. At a minimum, it's a place to start."
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