Supercommittee failure leaves healthcare providers questioning future cuts, impact on hospitals
Healthcare providers left wondering what comes next as law makers leave fiscal issues unresolved
Now that the deficit-reduction supercommittee has failed to reach agreement, healthcare providers are dealing with the reality that things could get worse before they get worse.
A series of congressional hearings, intense lobbying efforts and countless closed-door meetings were not enough to help the 12member Joint Select Committee on Deficit Reduction complete its task last week of delivering a proposal to Congress that iden- tified ways to reduce the federal deficit by at least $1.2 trillion over the next 10 years. This summer’s Budget Control Act required that unless Congress could identify such savings, “sequestration” would kick in starting in January 2013, when $1.2 trillion in automatic, across-the-board cuts over 10 years will be split between defense and nondefense programs. The law limits the amount of healthcare savings by capping reductions to Medicare payments at 2%.
“Despite our inability to bridge the committee’s significant differences, we end this process united in our belief that the nation’s fiscal crisis must be addressed and that we cannot leave it for the next generation to solve,” Rep. Jeb Hensarling (R-texas) and Sen. Patty Murray (DWash.), co-chairs of the panel, said in a statement two days before the supercommittee’s Nov. 23 deadline. “We remain hopeful that Congress can build on this committee’s work and can find a way to tackle this issue in a way that works for the American people and our economy.”
Richard Pollack, executive vice president at the American Hospital Association, said the failure was driven by the deep divisions between the two parties about the extent and design of revenue increases, which was “sort of the gateway to discussion of entitlement programs,” he said. “Clearly unless there was some agreement on revenues, there wasn’t going to be discussion on entitlement programs,” Pollack said, adding that sequestration made it easier for members to avoid reaching an agreement. “Failure meant that they would still achieve savings. They knew at the end of the day, we would still achieve savings of $1.2 trillion.”
For the healthcare community, the automatic cuts would apply to Medicare payments to Medicare Advantage plans, part D (prescription drug) plans, and providers such as hospitals and physicians. In 2013, 2% of payments to plans and providers would be about $10 billion, according to analysis from the Kaiser Family Foundation.
“Sequestration means that arbitrary reductions in resources for patient care under Medicare will now be set to take effect under the law for the remainder of the decade,” Richard Umbdenstock, president and CEO of the AHA, said in a statement last
A line of dark rain clouds moves over the U.S. Capitol in
Washington on Wednesday, the supercommittee’s deficitreduction deadline. The panel failed to reach an agreement.