Hospital Groups Reach Deal for Savings To Help Fund Reform
On Monday, three major hospital associations reached a tentative agreement with the White House and key Senate Democrats to contribute about $155 billion in cost savings over 10 years to help fund health reform, industry officials familiar with the discussions said, the AP/Boston Globe reports (Espo, AP/Boston Globe, 7/7).
The American Hospital Association, the Federation of American Hospitals and the Catholic Health Association agreed to the plan (Connolly/Shear, Washington Post, 7/7).
Vice President Biden is expected to announce the agreement on Wednesday (Budoff Brown, Politico, 7/6).
Under the agreement, the bulk of the savings -- about $100 billion -- will be generated through lower Medicare and Medicaid payments to hospitals and $40 billion will be generated through a gradual cutback in payments to hospitals for treating the uninsured (Washington Post, 7/7).
"Disproportionate share hospital" payments will not be reduced unless certain health insurance coverage increases occur, CQ HealthBeat reports.
According to a lobbyist familiar with provisions under the agreement, scheduled payment updates also will be scaled back and a moratorium will be placed on specialty hospitals owned by physicians (Reichard, CQ HealthBeat, 7/6).
In addition, "hospital officials have an understanding" that the government will not reimburse them at Medicare or Medicaid rates if the final reform legislation includes a public plan option, the Post reports.
President Obama last month proposed more than $200 billion in reduced hospital payments to fund health reform (Politico, 7/6).
However, an unidentified hospital executive said, "There was no way we could tolerate $200 billion" (Washington Post, 7/7).
White House Office of Management and Budget Director Peter Orszag also had said that hospitals could reduce spending by $110 billion if they use health information technology and improved coordination of care (Herszenhorn, New York Times, 7/7).The White House, Senate officials and representatives of the hospital associations declined to comment on the agreement (CQ HealthBeat, 7/6). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.