Su­per­com­mit­tee fail­ure leaves health­care providers ques­tion­ing fu­ture cuts, im­pact on hos­pi­tals

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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.

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