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Tentative "Doc Fix" Deal Spares OPD Clinic Cuts But Hits Medicaid DSH and Medicare Bad Debt

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U.S. House and Senate conference committee members working to address the 27% Medicare physician fee schedule cut that will go into effect March 1 under current law, appear to have reached a tentative agreement that would extend the reprieve to doctors from that cut through the end of the year. The deal has yet to be formally announced and agreed to by conferees and leaders. If approved, it could be voted on in each chamber as early as Friday.

HANYS understands that currently, the proposed reduction to Medicare hospital outpatient department (HOPD) evaluation and management (E&M) clinic services has been excluded from the tentative agreement. HANYS and its members have advocated for the protection of HOPD E&M clinic funding to preserve patient access to physician services in communities across New York State.

Regrettably, conferees have offset the cost of a Medicare “doc fix” in part by cuts to hospitals and health systems. HANYS has urged Congress to address the Medicare doc fix permanently and in a way that would do no harm to hospitals.

Reports from sources on Capitol Hill and in numerous press reports indicate the cost of the doc fix would be paid for through: 

  • $6 billion (nationwide over ten years) reduction in Medicare allowable bad debt for hospitals and skilled nursing facilities;
  • $4 billion (nationwide over ten years) in Medicaid Disproportionate Share (DSH) funding reductions; cut to be implemented in 2021; and
  • $5 billion reduction from the Affordable Care Act (ACA) Prevention Fund.

Details are few, but it appears that a number of Medicare “extenders” are included in the package, among them would be an extension through the end of the year of the Medicare HOPD hold-harmless for small rural and Sole Community Hospitals, and the “Section 508” wage index policy for four months. The package does not include an extension of the Medicare Dependent Hospital program, which will expire at the end of September.

HANYS will provide members more details as they become available. Contact: Susan Van Meter

Published February 15, 2012