Navigation Links
N.J. Hospitals Face $97 Million in Medicare Cuts
Date:5/22/2009

Impact of New Payment Rule Could Reach $500 Million by 2014

PRINCETON, N.J., May 22 /PRNewswire-USNewswire/ -- New Jersey hospitals stand to lose $97 million in federal funds next year and more than $500 million over the next five years under new Medicare payment rules proposed to take effect in October, according to an analysis by the New Jersey Hospital Association.

NJHA's Health Economics department examined the impact of three provisions under the Centers for Medicare and Medicaid Services' 2010 inpatient prospective payment proposed rule, which sets Medicare payment policies. The proposed rule was released May 1 and is slated to be finalized Aug. 1. It would take effect Oct. 1, the start of the federal fiscal year.

"This is more devastating financial news for hospitals in our state," said NJHA President and CEO Betsy Ryan. "New Jersey already has seen nine hospitals close in the last two years, and more will surely follow if we continue to chop away at the payments they receive for taking care of patients."

The proposed rule makes several changes, including two so-called "behavioral offsets" which reduce payments to hospitals to adjust for variables in coding and classification of claims and another that would eliminate capital funds distributed under the graduate medical education (GME) system. The GME program provides funding to teaching hospitals to help cover the added costs of training new physicians.

NJHA analyzed the impact each provision would have on the state's hospitals:

  • Under the "operating behavioral offset," New Jersey hospitals would see their annual "market basket" adjustment -- similar to an inflation adjustment -- cut from 2.1 percent to 0.2 percent. This change would equal a $77 million loss for New Jersey hospitals next year and a total of $409 million over the next five years.
  • The "capital behavioral offset" would be reduced from an anticipated increase of 1.2 percent to a cut of 0.7 percent. The impact would be a $6.1 million loss statewide next year and $31 million over the next five years.
  • Existing capital IME funding would be eliminated entirely under the proposed rule, a loss of $14 million next year and $71 million over the next five years.

NJHA, along with the American Hospital Association, is working with Congress members to stop these cuts to hospitals. All told, the nation's hospitals stand to lose an estimated $11 billion over the next five years, based solely on the two behavioral offset changes.

"Medicare reimbursement rules can be very complicated but the potential impact is simple and sobering," said Sean Hopkins, NJHA's senior vice president of health economics. "Cuts of this depth mean that hospital services and hospital jobs are in jeopardy."

Beyond these three specific items, the proposed rule contains yet another worrisome provision for New Jersey hospitals -- one that could mean financial gains for some hospitals and losses for others. The provision, called the imputed wage index floor, gives New Jersey hospitals a minimum reimbursement level for treating Medicare patients. The federal government established this floor in 2005 to compensate for the high labor costs in the region and to put Garden State hospitals on equal terms with hospitals in other states, where a rural floor ensures their reimbursements do not fall below a certain level.

Current law, however, calls for this floor to expire in 2011. It also requires any changes in hospitals' payments to be budget-neutral on a statewide basis -- meaning that if one hospital sees its payments increase, other hospitals would sustain cuts of the same amount. As much as $44 million in Medicare funds could be vulnerable to this shift next year.

NJHA is working with members of New Jersey's congressional delegation to extend this floor beyond 2011 and also ensure that any budget-neutrality adjustments are computed nationally. That approach, which CMS currently uses, spreads the impact among hospitals nationwide, ensuring that any losses are minimized.


'/>"/>
SOURCE New Jersey Hospital Association
Copyright©2009 PR Newswire.
All rights reserved

Related medicine news :

1. Security Officers Who Protect Kaiser Hospitals Rally With Community Supporters for Access to Affordable Healthcare
2. Minnesota Hospitals Pay $2.28 Million to Settle Medicare Fraud Charges Involving Kyphoplasty
3. Minnesota Hospitals to Pay U.S. $2.28 Million to Settle False Claims Act Allegations
4. Top International Hospitals Join Medeguide
5. Top Five Things Hospitals Need to do in Order to Remain Safe and Secure
6. CPM Resource Center and The Shams Group Partner to Help Hospitals Integrate Evidence-Based Clinical Content Into Information Systems
7. U.S. News Media Group Announces Americas Best Hospitals Video Series
8. Organ Donation Policies Vary Among Childrens Hospitals
9. Secretary of Health Unveils Pennsylvanias New Portable Hospitals in Lehigh County
10. Kaiser Foundation Health Plan and Hospitals Report First Quarter 2009 Financial Results
11. TouchPointCare Introduces TPC Transition Home to Help Hospitals Reduce Unplanned Readmissions
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:10/13/2017)... , ... October 13, 2017 , ... Apple Rehab ... services, staged a mock evacuation of the facility as part of a disaster drill ... Department, Echo Hose EMS and Shelton City Emergency Manager, as well as the ...
(Date:10/13/2017)... ... October 13, 2017 , ... Ellevate Network, the leading network ... advocate for action towards gender equality at their inaugural Summit in New York City ... and reached a social audience of over 3 million. To watch the Mobilize Women ...
(Date:10/13/2017)... ... 2017 , ... Talented host, actor Rob Lowe, is introducing ... new episode of "Success Files," which is an award-winning educational program broadcasted on ... subject in-depth with passion and integrity. , Sciatica occurs when the sciatic nerve ...
(Date:10/13/2017)... ... ... “America On The Brink”: the Christian history of the United States and ... of published author, William Nowers. Captain Nowers and his wife, Millie, have six ... years in the Navy. Following his career as a naval aviator and carrier ...
(Date:10/12/2017)... Orleans, LA (PRWEB) , ... October 12, 2017 , ... ... centers in the U.S., announced today its plans to open a flagship location in ... will occupy the former Rooms To Go store next to Office Depot in the ...
Breaking Medicine News(10 mins):
(Date:10/10/2017)... Pa. , Oct. 10, 2017   West ... in innovative solutions for injectable drug administration, today shared ... West,s ID Adapter for improving the intradermal administration of ... Fourth Skin Vaccination Summit in May 2017 by Dr. ... Lead, Polio Department, World Health Organization (WHO), and recently ...
(Date:10/4/2017)... Oct. 4, 2017 OBP Medical ... illuminating medical devices, today announced regulatory approval from ... Agency (or Agência Nacional de Vigilância Sanitária (ANVISA)) ... cordless surgical retractor with integrated LED light source ... illumination and exposure of a tissue pocket or ...
(Date:10/2/2017)... COPENHAGEN, Denmark , Oct. 2, 2017 The ... tool in the struggle to reverse the tide of prescription ... plan for regulating their medicine intake and stepping down their ... is set to launch in December 2017; the first 100,000 ... access. Learn more at http://www.rebound-solution.com/ ...
Breaking Medicine Technology: