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Hospital leaders get ready to send a no-cuts message to Congress before sequester begins

February 22, 2013


 With pressure mounting for Washington to find a way to avoid automatic spending cuts that are set to begin next Friday under the “sequester,” hospital leaders from across the country will be on Capitol Hill Tuesday to urge their lawmakers to reject looming Medicare cuts and to protect payments for hospital care that is at risk in several approaching fiscal deadlines.

Further hospital payment cuts would reduce patients’ access to care and “mean fewer jobs in our community,” says Dan McElligott, president of Saint Francis Medical Center in Grand Island, NE. “It would have a negative impact on the health care field altogether.” McElligott is among the many hospital leaders who will be in Washington on Feb. 26 to make the case to lawmakers as part of the AHA’s Advocacy Day. Following the briefing, hospital leaders will take their no-cuts message directly to legislators.

While both Democrat and Republican lawmakers say they don’t want the billions of dollars in sequester cuts to take effect, there is no agreement so far on how to stop them. With Congress in recess this week, President Obama urged lawmakers to pass a smaller package of spending cuts and tax reforms to delay the sequester from taking effect so legislators can craft a larger deficit-reduction deal.

But congressional Republicans, who accepted tax increases under the “American Taxpayer Relief Act” (ATRA), oppose any proposal that calls for more taxes, while congressional Democrats balk at GOP calls for changes to entitlement programs. The sequester.
In approving ATRA last month, Congress postponed until March 1 some $85 billion in 2013 spending cuts imposed by the “Budget Control Act.” Half will come from defense and half from other portions of the government’s budget, including an automatic 2% cut in Medicare funding. Those automatic Medicare spending cuts are expected to take effect for hospitals at the beginning of April.

The AHA has expressed its concerns about the impact of those cuts on hospitals – and also is concerned that the sequester could be suspended only for certain programs (such as defense), with lost savings potentially replaced by further reductions to Medicare and Medicaid payments to providers.

“Hospitals have given enough already, and we’re down to the bone at this point,” said Chip Falahee, senior vice president of legal and legislative affairs for Bronson Healthcare Group, in Kalamazoo, MI, who participated in the AHA’s Feb. 13 Advocacy Day. New Simpson-Bowles plan. Former Sen. Alan Simpson, R-WY, and President Clinton’s Chief of Staff Erskine Bowles, who together chaired the president’s bipartisan National Commission on Fiscal Responsibility and Reform, earlier this week offered an updated deficit reduction plan calling for $2.4 trillion in savings through a combination of spending cuts and tax changes.

Under the 10-year plan, Medicare and Medicaid spending would be reduced about $600 billion by “improving provider and beneficiary incentives throughout the health care system, reducing provider payments, reforming cost-sharing, increasing premiums for higher earners, adjusting benefits to account for population aging, reducing drug costs, and getting better value for our health care dollars.” For more, click on: http://tinyurl.com/a5ybloj.

No more cuts. Hospital leaders participating in the Feb. 26 Advocacy Day briefing in Washington or via webcast, will receive the latest update on concerns related to several approaching fiscal deadlines, which have implications for hospital funding (see table below). To register for the webcast, visit


Fiscal flashpoints. On March 27, the current funding for the federal government runs out, raising the threat of another shutdown fight. At the same time, Congress is poised to embark on the annual process of drafting a budget resolution. House Budget Committee Chairman Paul Ryan, R-WI, has set a top line goal of balancing the budget within 10 years without raising new revenue.

By the end of the year, Congress also must address Medicare’s physician payment formula. Doctors will face a 25% reimbursement cut without another in what has been a series of short-term payment fixes or a permanent fix. House Energy and Commerce Committee Chairman Fred Upton, R-MI, recently predicted that legislation repealing the current physician payment system would be on the House floor before the August congressional recess.

To help the field spread the no more cuts message, the AHA developed a video message hospital leaders can share with their staff, board members and community. For more information and to share the video via Twitter, Facebook and other social media, go to www.aha.org/protectcare. Real entitlement reforms. Recognizing the need for Medicare reform, the AHA, in a Feb. 15 letter to Sen. Orrin Hatch, R-UT, expressed its support for raising the Medicare eligibility age to 67, citing new health coverage protections for seniors staring in 2014, and modifying Medigap plans to avoid unnecessary use, among other recommendations. Hatch had urged stakeholders to respond to his plan for reforming entitlements. To view the AHA’s letter click on: http://tinyurl.com/afrrxnl.

By Pete Davis