Healthcare comprises one-sixth of the US economy and with the concern about the mounting national debt, healthcare is a key area of attention in the US election.US Congress has put in place efforts to curb federal deficits which have resulted in a policy of “no new deficit spending,” and a concept described as the “fiscal cliff”. The fiscal cliff is the combination of large spending cuts and tax increases that are scheduled to be automatically enacted at the start of 2013 unless Congress puts forward alternative plans.
One of the cuts is for reductions of 2.0% each year in most Medicare spending, including government funding for hospices (total savings: $123 billion). US lawmakers are looking at other options and all areas of the federal budget to raise the funding to avoid going “over the cliff.”
The Hospice Action Network (HAN) of the National Hospice Palliative Care Organisation has reviewed the Budget Control Act (BCA) of 2011 and the process described as ‘sequestration’ for reduction in spending. HAN has written an assessment describing what this could mean for hospices in the USA.
Pay rates for Medicare services would be lowered by 2%, across the board so that a hospice that bills Medicare for $100 would be paid $98 for all levels of service. These cuts would be in addition to the reductions hospice already faces from cuts related to the Affordable Care Act (healthcare reform) and other recent Medicare reductions. Specific effects of the sequestration on hospice could result in reductions in force and limits on innovative programs for patients and families, among other cost containment strategies.In addition to the cuts the hospice community is facing through sequestration, all Medicare providers are at risk of being utilized as revenue raisers to offset the costs associated with extensions related to other components of the fiscal cliff.
HAN comment that “to date, only MedPAC has proposed specific reductions to the hospice industry. All other plans have proposed broader cuts that affect hospice as a part of the Medicare community, but don’t make hospice-specific recommendations. MedPAC has considered specific cuts to hospice in the past, including decreases to the payment update for fiscal year 2013. An additional proposal included a reduction of 6% in the payments hospices would receive for care provided in the nursing home. Identifying these areas for potential cuts makes the hospice community especially vulnerable as Congress grapples with these extremely challenging economic issues.”