Noteworthy News

Implications of Fiscal Cliff for Urban Safety-Net Hospitals

Among the most important aspects of the current fiscal cliff crisis are Medicare payments to physicians and Medicare sequestration.  Both have major implications for the nation’s private urban safety-net hospitals.

Medicare payments to physicians are governed by the Medicare sustainable growth rate formula, or SGR.  According to that formula, Medicare payments to physicians will be cut 27 percent on January 1, 2013.  Since 2003, Congress has delayed implementation of similarly scheduled cuts – a process widely known as the “Medicare doc fix.”

Under Medicare sequestration, the deficit reduction spending compromise crafted by Congress late last year calls for all Medicare payments to be cut two percent as of January 1, 2013.  At the time sequestration was passed, the cuts it encompassed were considered so damaging that it was thought inconceivable that Congress would permit them to take effect.  Now, they are scheduled to take effect in six weeks.

Urban safety-net hospitals, which employ growing numbers of physicians who serve large numbers of Medicare patients, have a considerable stake in the outcome of these policy deliberations.

Read more about how the fiscal cliff could affect physicians and hospitals that own medical practices in this Medicare NewsGroup articleStock Photo.

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