Ouch! Mounting Medicare Cuts Hurt

From HHIC, June 22, 2015

During the federal fiscal year (FFY) 2015, Hawaii hospitals experienced a substantial reduction of nearly $18 million in direct Medicare reimbursements, with projected payment cuts of $838 million to follow in the next ten years.

Hawaii hospitals face critical challenges to mitigate the effects of Medicare cuts while still improving both the quality of care and the patient experience. HHIC Insights Medicare report illustrates the impact of the numerous Medicare payment cuts to Hawaii’s hospitals and how it would be potentially exacerbated by additional cuts proposed by Congress.

A copy of the report is available at no cost. Please create an account to download the report.

LINK: Download Report 

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Medicare cuts, underpayments could mean $3.3B loss for Hawaii hospitals, study shows

PBN: Medicare payment cuts and reductions to reimbursement rates for Medicare services could add up to a $3.3 billion loss for Hawaii hospitals between 2010 and 2024, according to a study by Hawaii Health Information Corp.

During the current federal fiscal year, Hawaii experienced a reduction of nearly $18 million in direct Medicare reimbursements. Over the next 10 years, all enacted Medicare payment cuts will result in $838 million in lost revenue, or a 11.2 percent reduction in total Medicare fee-for-service revenue, according to “Ouch! Mounting Medicare Cuts Hurt,” released by the Hawaii Health Information Corp. this month.

In addition to those payment reductions, Hawaii hospitals are projected to be underpaid by $2.5 billion over the next decade if current patient volume and CMS payment reimbursement rates continue. The total price tag will be more than $3 billion for the 15-year period.

Hawaii hospitals are currently reimbursed 86 cents to each dollar they spend on Medicare services....

The health care reform law has made an effort to abate rising health care costs and ensure coverage for all, but the Medicare “one size fits all rule” puts Hawaii at a disadvantage, Sybinsky said....

But Hawaii could adopt a strategy implemented in Maryland, according to Sybinsky.

The state has had a waiver for nearly three decades, but recently revised it by altering payments to physicians, nursing homes, and other institutional providers. By guaranteeing that its cost-savings technique would avoid increased patient costs, Maryland was able to work out a waiver with the federal government to receive a $1-$1 reimbursement ratio.

Sybinsky says Hawaii is capable of something similar.

“At least twice in Hawaii’s history we have done significant health care reform,” he said. “In 1974, we passed the Prepaid Health Care Act, and frankly, we had to fight for it. Hawaii has made some major out of the box changes and I don’t see a reason why we can’t do it again.”

Flashback: Health Insurance? No need: Abercrombie promises to dump Prepaid Health Care Act

read ... Thanks, Obama