fah hospital policy blog

Perspectives on health policy affecting America’s hospitals and the patients we serve.

Category Archives: backstop

Reality Check: The Real State of Hospitals in Our Evolving Health Care Model

March 10, 2014 | Chip Kahn

Category: Backstop, Health Care Delivery, Media, Realignment, Spending Slowdown, Uncategorized

In a recent opinion piece in The New York Times, Merrill Matthews, a resident scholar with a conservative think tank, disparages hospital realignment and declares hospitals the probable “big winners” as the nation’s health care landscape transforms toward integrated systems and coordinated care. Mr. Matthews bases his assertions upon a series of claims that run counter to what is really happening with hospitals serving their communities today. What’s worse, they neglect to factor in crucial data that tell a much different story. To accurately weigh in on the state of hospitals, it’s necessary to operate with all of the facts. This is the reality for America’s hospitals.

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Rep. Gary Peters Stands Up for Seniors, Calls for a Stop to Medicare Cuts

March 05, 2014 | Ryanne

Category: Backstop, Medicare

Congressman Gary Peters (D-MI) has submitted a letter to HHS Secretary Sebelius highlighting the critical importance of the Medicare backstop to seniors and the hospitals serving Medicare beneficiaries in every community. Rep. Peters is the latest member of Congress to send such a letter to HHS, standing up for America’s seniors and this essential component of the Medicare program aimed at providing assistance to low-income beneficiaries .

When Medicare was created in the 1960s, Congress realized there would be instances when seniors truly would not be able to cover their Medicare cost-sharing responsibilities. To ensure every single Medicare beneficiary could receive treatment regardless of ability to pay, Congress created the Medicare backstop as a mechanism to cover that portion of the cost of their care.

And while the backstop was originally set to cover 100% of uncompensated costs, over time cuts to this pillar of the Medicare program have reduced payments to just 65%. This partial payment means hospitals are left to absorb 35% of uncompensated Medicare cost-sharing, which total billions of dollars a year. In Michigan alone, as Rep. Peters’ letter states, that is nearly $200 million in uncompensated care to seniors for just one state.

Rep. Peters calls for no further cuts to the Medicare backstop in the FY 2015 budget considerations, citing the risks these cuts would bring which include diminished patient access to care. Hospitals today are operating on negative Medicare margins, which are currently at the lowest levels in history, making preservation of this core Medicare protection more critical than ever.

The FAH is grateful for the support of Members of Congress like Rep. Peters, who understand the vital importance of the backstop and preserving patient access to care. As more and more members join the call to stop cuts to the Medicare backstop, the FAH urges HHS to factor the historic health care spending slowdown trend into its budget considerations for 2015.

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South Florida Delegation Stands Up for U.S. Seniors with Support of Medicare Backstop

February 28, 2014 | FAH Hospital Policy Blog

Category: Backstop, Medicare

The entire bipartisan South Florida delegation of the U.S. House of Representatives has joined together and signed a letter to HHS Secretary Kathleen Sebelius, expressing concerns with the HHS 2014 Fiscal Year budget, specifically cuts to the Medicare backstop. This backstop, commonly referred to as “Medicare bad debt”, is an essential piece of the Medicare program that protects seniors who are unable to pay their cost-sharing obligation.

The backstop ensures all seniors have access to critical care regardless of their ability to pay- a notion so important to Medicare that the backstop was actually created with the program’s inception in the 1960s. Without the backstop, hospitals would struggle to deliver the quality of care their patients expect and deserve.

The Administration’s proposed cuts to the backstop in its FY 2014 Budget would impact access to care for all patients, including longer wait times in the emergency room, reduced access to cancer specialists, fewer training resources and fewer resources for nursing staff and clinicians.

The FAH is grateful to those in Congress who understand the necessity of the Medicare backstop to protect America’s seniors. The following members comprise the bipartisan South Florida delegation and have signed the letter to Secretary Sebelius, urging the Department not to include cuts to the Medicare backstop payments in its FY 2015 Budget:

Rep. Lois Frankel
Rep. Mario Diaz-Balart
Rep. Joe Garcia
Rep. Alcee Hastings
Rep. Patrick Murphy
Rep. Tom Rooney
Rep. Ileana Ros-Lehtinen
Rep. Debbie Wasserman Schultz
Rep. Frederica Wilson

These members understand that perpetual cuts to the Medicare program are not sustainable and are detrimental to the long-term success and survival of this essential program. The FAH thanks the South Florida delegation for signing this letter. As HHS and Congress work to find Medicare savings, we urge them to strongly consider these valid requests from Members of Congress to find long-term policy solutions, and put an end to short sighted Medicare cuts that will harm local community hospitals and the patients they serve.

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Representative Sinema Stands on the Side of Seniors

January 22, 2014 | FAH Hospital Policy Blog

Category: Backstop, Medicare

Today, the Phoenix Business Journal published an opinion piece by Reginald Ballantyne III of Tenet Healthcare Corporation. In the editorial, Mr. Ballantyne outlines the purpose of a crucial component of the Medicare payment system – the Medicare backstop. Commonly referred to as “bad debt”, the Medicare backstop is a protection included in the inception of the Medicare system to cover the costs of low-income seniors who are unable to pay their cost-sharing obligation. The backstop is a pillar of Medicare, and has existed for decades to protect those seniors so they would never hesitate to seek essential medical care.

Unfortunately, this essential part of the Medicare law has been the target of harsh cuts. As Ballantyne outlines in the piece:

“…Congress recognized there would always be a shortfall in what seniors could pay as their share of costs. But, once reimbursed at 100 percent, the backstop gradually has been cut over the years. Providers are now only reimbursed only 65 percent of what seniors can’t pay in cost-sharing. The current administration has proposed decreasing that amount to 25 percent”

The Medicare backstop can no longer be viewed by Congress as an easy source of funding to compensate for other financial priorities. Hospitals have already faced excessive cuts totaling more than $400 billion over the next 10 years—$113 billion of cuts enacted in the last three years alone. Further Medicare cuts for essential hospital care threaten local hospitals and the communities that depend on them.

Fortunately, Arizona Representative Kyrsten Sinema is one of the Members of Congress who chooses to stand up for seniors and hospitals, opposing any additional cuts to the Medicare backstop. Sinema points out in a letter to HHS Secretary Kathleen Sebelius that seniors who are eligible for both Medicare and Medicaid account for 31% of Medicare backstop payments in Arizona.

Arizona’s Medicare beneficiaries are fortunate to have a Representative in Congress who recognizes the financial and healthcare delivery obstacles that patients and hospitals face, and is working to protect American seniors.

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