Fiscal Cliff Deal Could Shift Medicare Costs to Vermont Hospitals

According to an article in Vermont Digger, a provision in the recent fiscal cliff deal could end up shifting medicare costs to Vermont hospitals:

An appendage to the fiscal cliff deal that Congress passed last week kicked a 26.5 percent cut in Medicare physician payments down the road for another year.

But the temporary “Doc Fix,” as it is popularly called, comes at the expense of hospitals’ bottom lines, and some Vermont providers and government officials are concerned that the federal decision will drive up the cost of care in the Green Mountain State.

“The Doc fix is crucial … that had to happen without question,” said Stephen Leffler, chief medical officer at Fletcher Allen Health Care. “But they robbed Peter to pay Paul because they’re going to pay a huge chunk of that by reducing payments to hospitals.”

The payment remedy carries a price tag just north of $25 billion. Of that amount, $10.5 billion is slated to come from Medicare cuts between 2014 and 2018. Another $4.2 billion is set to come from a reduction in Medicaid payments through the disproportionate share program for hospitals that serve a high level of low-income patients. In fiscal year 2011, Vermont hospitals received about $22.5 million in Medicaid disproportionate share payments.

The Shumlin Administration has assured us that our state would be receiving federal assistance to help deal with the costs on Shumlincare.  At this rate the only thing we seem to be getting from the federal government is an added health care cost burden.  In light of this, perhaps we should take a closer look at the funding numbers when and if they ever are provided to us.  If we are counting on federal assistance to make everything add up, we may be living on Fantasy Island.