Tennessee Hospitals Face Medicare Cuts As High As $7.4 Billion

NASHVILLE, TN, January 29, 2013--Hospitals in Tennessee stand to lose as much as $7.4 billion in Medicare reimbursement over the next 10 years and, absent a way to balance those reductions, many hospitals will have to cut services and expenses, Tennessee Hospital Association (THA) President Craig Becker said today.

In addition to $5.6 billion already in place as a result of the Patient Protection and Affordable Care Act of 2010 (ACA), Budget Control Act of 2011 (BCA), Middle Class Tax Relief and Job Creation Act of 2012 (JCA), and American Taxpayer Relief Act of 2012 (ATRA), another $1.9 billion in cuts currently are being discussed or considered at the federal level, Becker said.

“Even though we have some of the best and most efficient hospitals in the country right here in Tennessee, there is no doubt these federal cuts to Medicare, without some means to mitigate them, will reduce access to care for Tennesseans,” he said. “Ultimately, the ripple effect will be felt by every Tennessean, especially those in the smaller communities across the state.”

Under the terms of the ACA, funds are available at the federal level to expand healthcare coverage to patients who are uninsured and underinsured. Taking advantage of those dollars would help hospitals reduce the amount of unreimbursed care they currently provide. Last year in Tennessee, hospitals provided $1 billion in bad debt and charity care and already had $600 million in unreimbursed Medicare cost.

For the first three years of the Medicaid expansion, the federal government would pay the full cost of the expanded coverage. After that, the state would be required to provide matching dollars, but at a much lower rate than it currently provides for caring for Medicaid or TennCare enrollees.

Becker said the stakes are so high that Tennessee cannot afford to eliminate any option without a better way to deal with the extensive reductions. 

“These actions at the federal level will cripple hospitals and communities in Tennessee unless there is some way to offset them.The burden of that impact would fall to all hard-working Tennesseans, employers, hospitals and the local communities they serve,” Becker concluded. “So while walking away from federal funding might be appealing to some, absent a better option, expanding coverage is the only responsible thing to do.” 

Tennessee Hospital Association (THA): THA is the premiere organization in Tennessee that promotes and represents the interests of all hospitals, health systems and health careers. Established in 1938 as a not-for-profit membership association, THA serves as an advocate for hospitals, health systems and other healthcare organizations and the patients they serve. It also provides education and information for its members, and informs the public about hospitals and healthcare issues at the state and national levels. Additional information is available at www.tha.com.

Link: Cuts Summary By County

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