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Experts Debate Impact of Medicare Pay Cuts Triggered by Super Committee Failure

Last month the federal “Super Committee” failed to reach agreement on a debt reduction scheme. As a result, mandatory cuts in virtually all federal spending areas are set to take effect. Of course, Medicare is no exception, and pending any Congressional intervention, the public healthcare providers will see a decrease in funding when the cuts set in. Many experts have begun weighing in on the consequences of these cuts on the healthcare industry. Each Chicago medical malpractice attorney at our firm has been particularly interested in understanding how these changes are likely to affect patients and quality of care standards.

The mandated cuts, known as “sequester,” will ultimately reduce federal spending by $1.2 trillion over the next ten years. The cuts will hit healthcare spending less than other sectors, because Medicare spending cuts will be capped at two percent per year. In addition the cuts will come out of provider payments and managed care plans-not in senior premium increase or cost-sharing. In total, Medicare cuts would reach roughly $123 billion during that ten year period.

An article in last week’s Washington Post discussed the same topic. It was reported that there are severe disagreements about the ultimate effect. Expectedly, many medical professionals are warning that there may be serious repercussions on the entire health care industry. Their specific concerns center on possible hospital staff layoffs and facility consolidations. In addition, there are concerns that some doctors may stop accepting Medicare patients-limiting the medical options for those who depend on this healthcare system. An underlying concern whenever layoffs and facility changes are enacted is the possibility of increased instances of medical malpractice.

Yet, many health care industry analysts are refuting those dire predictions, and suggest that these concerns are misguided exaggerations. In fact, an independent agency advising Congress on Medicare suggests that even after the cuts, many in the industry will continue to be paid too much. In addition, there are suggestions that the cuts are actually marginal. In that way they can be easily absorbed by the facility and might work to encourage more efficient care.

Unfortunately, there is some evidence over the years that some doctors and hospitals change their recommended medical advice based on financial factors. For example, a Medicare Payment Advisory Commission (MedPAC) found that many doctors have compensated for medical pay cuts in the past by providing higher costs medical services in larger amounts. That is why, even though there have been price reductions over the past many years, the average cost of Medicare spending per patient has increased by 64% since 2000. It should go without saying that it is clearly inappropriate, and an instance of intentional medical malpractice, for medical decisions to be guided by financial concerns of the medical provider. It is that abuse that has led to problems like those cases where thousands of patients receive unnecessary heart stents because of the value of those procedures to the heart surgeons involved. No matter what happens at the federal level with the sequester (or the changes mandated under the new healthcare law), it remains imperative that patient care not be unnecessarily sacrificed. When it occurs in our area it is often a case of Illinois medical malpractice, and we will work hard to help all those who suffer as a result.

See Our Related Blog Posts:

Public Urged to Contact Members of “Super Committee” to Protect Patient Rights

Medical Malpractice Has No Role in Super Committee Deficit Reduction Costs

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