Hospitals and Labs Pay for the Doc Fix

Today’s Managing Health Care Costs Indicator is 19%

It’s good news is that Congress is actually working – and has fast-tracked reauthorizing the Social Security tax break,   unemployment insurance, and the “doc fix” to prevent 27.4% decreases in Medicare physician payment.  Providing relief to those who are unemployed in this terrible economy, avoiding a middle income tax hike, and avoiding a catastrophic decrease in physician fees are all important.  Doing these together makes it harder to defeat the effort.

Doctors are the health care winners in this, at least for 2012.  Let’s look at who are the losers.  Kaiser Health News has links to a number of articles on this topic.  

·          Hospitals are the biggest losers.   They’ve already given back substantial future increases as part of the Affordable Care Act, and the current legislation will remove federal payment for bad debt and decrease payment for disproportionate share hospitals – those which take care of a large share of the most impoverished Americans.   Safety net hospitals in Massachusetts have fared poorly under health care reform, and this legislation makes it likely that this will be repeated across the country.  Rural hospitals maintained their enhanced fees.
·         There will be a $5 billion clawback from the public health funding promised in the Affordable Care Act.   It’s public health efforts that have the highest return on investment – and it’s disheartening to see us lower this investment.  However, many Republicans opposed this public health funding – and it’s easier to stop paying for education to prevent future disease than to make it difficult for Grandma to find a physician
·         Laboratories are big losers as well. Their fees will be shaved another 2%; The Affordable Care Act had already lowered laboratory fees by as much as 19%.
·         Louisiana is a surprise loser.  Senator Mary Landreiu had obtained an additional $2.5 billion in Medicaid payments for her state.  This is being rescinded.

The “doc fix” only cost $20 billion – since it is only for the rest of 2012. This means we’ll be back to this issue again at the end of the year, and by that time the cut to be averted will be even larger than 27.4%.