Fiscal Cliff May Affect Medicare Reimbursements In Cleveland

Posted on: November 20th, 2012 by SamTabes No Comments

If the United States ends up falling off the looming “fiscal cliff”, Northeast Ohio’s health care providers would shoulder millions of dollars in revenue cuts to manage costs throughout the area, specifically the Greater Cleveland area.  The inability of Congress and the White House to work together and come up with a budget plan has many providers worried about health care costs and Medicare reimbursements.

This “fiscal cliff” situation could end up triggering billions of dollars in spending cuts and increases in taxes according to Timothy Magaw’s article on CrainsCleveland.com.  These cuts would include about $10.7 billion in cuts to the Medicare program.  Northeast Ohio has a growing aging population like much of the nation and this has many seniors very concerned.  Many local hospitals rely heavily on Medicare to support their overall operations and more cuts could be disastrous to their system.

As an example, The Cleveland Clinic has 43% of their volume coming from Medicare patients.  Going over the “fiscal cliff” could cost the Cleveland Clinic up to $22 million in reimbursements.  This doesn’t count the multiple health care systems throughout the Greater Cleveland area that also rely heavily on Medicare payments.  The possibility of Medicare cuts account for about a 2% reduction in the federal program’s spending in 2013 so there is a long ways to go.  Because Medicare reimbursements are already on the conservative side, further cuts cause a wave of fear throughout hospital systems everywhere.

Clinic CFO Steve Glass points out that $22 million is a lot of money and can cause big problems for the hospital.  Glass says the Clinic would continue to process improvement initiatives they started in the past few years which includes the consolidation of certain services at one location as opposed to multiple locations.  They have built the possibility of cuts into their Cleveland health care budgeting plans as a precautionary measure, but it’s hard to say how they will function the same with more cuts coming.

It’s unclear how many jobs may be lost, but the Ohio Hospital Association, a statewide lobbying group, believes the Medicare cuts could lead to over 31,000 jobs lost throughout the state.  This number is scary and weighs heavily on the minds of Ohioans.  Cleveland attorney Matthew Albers, says it’s a rough environment and no one knows what to expect making planning very difficult.  If Congress can work together and get the budget under control it’s hard to say if cuts will be any less.  Here is a list of some Cleveland area health insurance companies that may be affected by these federal budget cuts.

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