Health groups on Friday accused the federal government of having slashed $1 billion from Medicare spending, while industry groups blamed a “waste-of-money-scheme” that resulted in tens of billions of dollars being spent on the healthcare system.
Key points:A $1bn cut was announced by the Obama administration last yearThe cut came as hospitals reported a $1,000 jump in Medicare claimsThe cut was a result of an internal review that found the agency was failing to manage its own costs, with hospitals facing significant losses, and was costing the agency millions of dollars annuallyIt comes as hospitals are reporting a $600 jump in their Medicare claims in the first two weeks of this year, the most since 2009The Federal Hospital Association, the industry group representing the nation’s 4.6 million hospitals, warned that the cuts would hurt Medicare as hospitals faced a $200 million drop in Medicare reimbursements for hospital outpatient care, while spending for hospital care for patients in intensive care units and intensive care beds was also down.
It came as the Obama White House said it was taking steps to make Medicare more affordable for the middle class, while hospitals, nursing homes and community health centers were also on the receiving end of cuts.
“This is not just about making Medicare better for seniors.
It’s about making it affordable for everyone in the economy, especially for middle-class families, who can’t afford to buy health insurance on their own,” said US President Barack Obama in a speech at the Association of State Health Officials (ASHO).”
And for the many of us who work in hospitals and other hospitals, it’s also about making sure that Medicare is always there to pick up the pieces when things go wrong,” he added.
In a separate speech, the US Chamber of Commerce said the Medicare cut was part of a broader effort to make the Medicare program more affordable.
“While the Medicare cuts announced today are small compared to previous cuts to the program, they do reflect a troubling pattern of overpayments and overspending on care and services,” the chamber said in a statement.
Industry groups were quick to point out that the proposed cuts were part of an overhaul that was approved by Congress in January and was to take effect in March. “
As part of this plan, Congress should approve the necessary offsets to the Medicare reductions that would help us balance the budget without hurting seniors, and the Senate should pass legislation that provides the necessary tax relief and other relief.”
Industry groups were quick to point out that the proposed cuts were part of an overhaul that was approved by Congress in January and was to take effect in March.
“The Medicare program is not going to be saved.
We don’t believe in cuts in the middle of the year, but we are not going away,” said David Himmelstein, president of the American Hospital Association.
“The bottom line is that we will continue to make every effort to reduce Medicare spending to the lowest level in over 30 years, which is where it needs to be, but Medicare is going to have to do more.”
The Medicare cuts come as hospitals have reported a 1,000 increase in Medicare claim claims in January, and as spending on hospital outpatient treatment, intensive care and nursing home care for Medicare patients increased by a whopping $200million in the last two weeks.
As a result, the number of hospitals receiving Medicare payments to cover the costs of patient care has doubled over the last four months, from about 200 to more than 2,600.
But the Federal Hospital Federation, the largest hospital association in the US, said the cuts were a result the agency had failed to manage their own costs and was paying millions of Medicare dollars to hospitals for overbilling and overuse of services.
The federation cited the Federal Mediation and Conciliation Board’s internal review as the main reason for the $1billion cut.
“The FMCB has been conducting a review of its management practices in the past year, and is concerned that the FMCBs management practices may be underutilizing its resources and potentially causing excessive spending,” the federation said in its statement.
The FHFA said the agency also had a waste-of.money-schemes program in place that resulted to a $400 million shortfall, and had been unable to recover it by the end of this fiscal year.
“We continue to believe that the program should be restructured so that it can pay for its costs, and for hospitals to be able to cover their own expenses while providing better care for their patients,” the FHSA said.
“We also believe that a system-wide review is necessary to ensure that we are using our resources efficiently and that there are no duplicative costs in our Medicare program.”
A Senate committee is scheduled to hold a hearing on Friday into the Medicare waste-program, with a vote expected by next week.
In its report to the Senate on the budget released on Friday, the FHCAs report said the administration had failed “to manage its excess funds”.