AHA: Hospital Medicare, Medicaid Payments Cut by $113B Since 2010

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The 10-year impact of regulatory actions on hospital payments since 2010 will involve an estimated $113 billion reduction in Medicare and Medicaid reimbursement, according to the American Hospital Association.

moneyThe AHA assessment — which excludes payment reductions included in the Patient Protection and Affordable Care Act — shows sequestration will lead to $53.8 billion in cuts, factoring in the two-year extension of sequestration cuts enacted by the Bipartisan Budget Act of 2013.

Additionally, according to the AHA graphic, hospitals will lose $2.1 billion to bad debt as a result of the Middle Class Tax Relief and Job Creation Act of 2012 and $12.2 billion to Medicaid disproportionate share hospital payment cuts included in the Middle Class Tax Relief and Job Creation Act of 2012, the American Taxpayer Relief Act of 2012 and the Bipartisan Budget Act of 2013.

The three-day window provision in the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 will lead to a $4.2 billion payment reduction for hospitals. The three-day Medicare payment window applies to outpatient services that hospitals and hospitals' wholly owned or wholly operated Medicare Part B entities provide to Medicare beneficiaries. It requires providers to bundle the technical component of all outpatient diagnostic and related non-diagnostic services with the claim for an inpatient stay when they are administered in the three days preceding an inpatient admission.

Furthermore, according to the AHA, hospitals will lose $35.3 billion to Medicare severity diagnosis-related group coding cuts in the American Taxpayer Relief Act of 2012 and CMS regulations.

Another $2.4 billion in cuts will come from an offset for the two-midnight rule, under which inpatient admissions are considered reasonable and necessary for Medicare beneficiaries who require more than a one-day hospital stay or who need inpatient-only treatment.

Finally, in accordance with the Bipartisan Budget Act, long-term acute care hospital payments will be reduced by $3 billion.

More Articles on Hospital Payments:
AHA: Medicare, Medicaid Underpaid Hospitals by $56B  
Hospital Groups: Don't Cut Medicare to Fund Unemployment Benefits  
AHA to MedPAC: Consider Sequestration Effects for 2015 Medicare Payments 

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