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Political Stalemate Results in Medicare Reimbursement Cuts

Posted 7:18 PM by

On Nov. 23, the congressional “Super Committee” of 12 members failed to reach an agreement on deficit reductions. This will trigger previously enacted budget cuts beginning in 2013. Particularly, Medicare reimbursement may see up to 2% payment cuts with a majority of the cuts to hospitals and a minority to physicians. Potentially hospital and physician Medicare reimbursement cuts from 2013 through 2021 will be $88 billion. Note that the scheduled cuts will not affect Medicaid reimbursements.   

To alleviate the Medicare reimbursement cuts, hospitals and physicians will need to align efforts by honing in on clinical efficiency. One avenue to align efforts is to implement a co-management agreement. Co-management agreements are centered on bringing physician and hospital leaders together, allowing for continuum patient care. One of the advantages of this arrangement is that physicians can remain independent in nature from hospitals.  

In this formal, legally contracted and Stark compliant arrangement, physicians and hospitals can mutually agree on procedures and evidence-based protocols to improve care. Many of the improvements can affect quality, efficiency, IT utilization and recruitment. The anticipated improvements can result in cost savings which will financially benefit hospitals and physicians while offsetting the looming cuts in Medicare reimbursement.

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Katz, Sapper & Miller’s Healthcare Resources Group serves healthcare providers, including physicians, hospitals and health systems, surgery centers, and long-term care facilities. Our team of healthcare professionals has the scope and depth to meet client needs. Learn more.

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