Hospitals Bypass Cuts with Grassroots Lobbying

Hospitals took some hits in the final fiscal cliff deal, as NAHAM News reported last week, but they managed to avoid the worst case scenario.  That scenario included cuts to any one of three key programs, which were all spared despite most health insider’s expectation that at least one would be cut in the deal. None of these three programs, outpatient payment funding, graduate medical education assistance, and Medicare “bad debt” payments, were in the deal when all was said and done.

A Politico article published this week attributes the save to the strong hospital lobby with good ties to members of Congress. The ties are not new, and it is not the first time that evaluation and management (E/M) spending has been spared from cuts. These cuts have been suggested in a number of deficit reduction plan recommendations and even passed the House in 2011. Each time, however, the cuts have been successfully fought back by hospital representatives.

The reasons why the hospital lobby has been so successful may lie in the fact that there is no shortage of congressional allies. Almost every Member of Congress has a hospital in his or her district that not only provides medical care, but also proves to be a large employer of constituents.  When these E/M cuts are proposed, hospitals and hospital groups can quickly organize a grass roots effort and send notes to their Representatives describing how the cuts would be bad.

The news is not all good, though. However strong these efforts may be, healthcare costs are a hot topic now, and cuts can be hidden in new legislation. This fiscal cliff bill included coding updates that would cost hospitals $10.5 billion and reductions in Disproportionate Share Hospital payments — which help facilities that care for a large number of uninsured patients — that would cost an additional $4.2 billion, according to some estimates.

With another fight on the way in the next few months, hospital advocates will go back to work to protect funding during the debt ceiling and sequestration negotiations. It is likely that the three programs will be back on the chopping block, along with additional changes to hospital coding.