fah hospital policy blog

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

Category Archives: backstop

South Florida Congressional Delegation Co-Signs Letter to Secretary Burwell on Medicare Backstop

March 05, 2015 | FAH Hospital Policy Blog Team

Category: Backstop, Medicare

For the second consecutive year, the entire bi-partisan Congressional delegation representing South Florida have co-signed a letter to HHS Secretary Burwell, calling for no further cuts to the Medicare Bad Debt Program. This program—a fundamental pillar of Medicare since the program’s inception in 1965—protects American seniors who are unable to pay their cost-sharing obligations under Medicare. The backstop is there to ensure American seniors do not have to worry about their ability to pay for the critical health care they need. Seniors represent an especially vulnerable population, often requiring more and greater health care services than other sectors of the population.

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Representative Gwen Graham Opposes Medicare Hospital Payment Cuts

February 20, 2015 | FAH Hospital Policy Blog Team

Category: Backstop, Medicare

In a letter delivered to HHS last week, Representative Gwen Graham calls on Secretary Sylvia Burwell to protect seniors in Florida from the effects of Medicare payment cuts to hospitals. Specifically, Representative Graham urged the Obama Administration to oppose Medicare bad debt cuts to hospitals which serves as a “backstop” for America’s seniors ensuring they will have access to hospital care.

In the 50 years since Medicare’s inception, bad debt reimbursement has helped hospitals, serving Medicare patients, defray part of the cost of seniors’ unpaid Medicare cost-sharing obligations. Over time, this “backstop” coverage has been reduced from 100% to now just 65%. Hospitals are forced to take on the 35% of uncompensated care as a result of the repeated cuts to bad debt reimbursement. Medicare was built to protect seniors, who as a vulnerable sector of the population require greater and more frequent care. Further, these cuts impact access to care for all patients, not just seniors.

As a result, hospitals are caught in the middle, with no room to negotiate. As Representative Graham explains in her letter:

“Unlike with private insurers, a hospital can’t renegotiate a contact with Medicare to make up for ‘bad debt’. Instead, the hospital is wholly reliant on the reimbursement policy set by Medicare.

The livelihood of many health care providers and patients is dependent on a viable Medicare program.”

Most importantly, the Medicare “backstop” provides seniors with a strong safety net if they cannot meet their cost-sharing obligations. When in need of critical medical attention, seniors should be able to focus only on their health care needs. Hospitals are first and foremost providers of this critical care, but in order to continue to provide the care communities expect, hospitals need a sustainable Medicare “backstop.”

The FAH applauds Representative Gwen Graham for her efforts to protect Florida seniors and the hospitals working hard to protect patient access to care.

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Congressman Ruiz Stands Up for Seniors and the Medicare Backstop

February 03, 2015 | FAH Hospital Policy Blog Team

Category: Backstop, Medicare

Congressman Raul Ruiz urged Health and Human Services Secretary Burwell to consider the importance of Medicare bad debt in a letter sent on January 27th. By defending the sanctity of the Medicare backstop and urging HHS not to impose any further cuts, Congressman Ruiz is standing up for California’s seniors.

One key aspect in Medicare is the cost-sharing obligation for beneficiaries, which requires seniors to pay some portion of the cost of care. However, not everyone covered through Medicare can meet those requirements, especially low-income seniors. When seniors cannot meet the obligations, hospital providers are faced with higher levels of uncompensated care, which ultimately affects the entirety of the facility’s financial stability.

At its inception, the Medicare backstop was created to specifically and directly ease the burden of uncompensated care faced by hospitals. However, in recent years, the Medicare backstop has been cut—taking what was a 100% reimbursement for uncompensated Medicare cost-sharing, and cutting it substantially—to 65%. This means that hospitals must take on 35% of the uncompensated care. Now, there is a proposal to reduce that Medicare payment to just 25%.

For California, the effects of these cuts would be severe. Congressman Ruiz explains in his letter:

“Should the proposed 25 percent partial payment take effect, California hospitals would lose nearly $1.5 billion over 10 years. My district is home to two community hospitals that serve many low-income seniors who often find themselves deciding between paying their utility bill or receiving health care; this change would increase the financial strain on these essential community hospitals who provide vital services at an affordable cost.”

Congressman Ruiz goes onto urge lawmakers to be careful as they consider the FY16 budget.

“As HHS and Congress look for Medicare savings, it is my view that we should only look to policies that have been fully vetted so that we may understand the impact these decisions will have on Medicare beneficiaries and the providers who serve them.”

It is more critical than ever to protect the Medicare backstop. This pillar of the Medicare program helps hospitals ensure patient access to care 24/7 and support their local communities. The FAH thanks Congressman Ruiz for his help in preserving the Medicare backstop on behalf of America’s hospitals and seniors.

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Senator Rubio Urges HHS Secretary Burwell to Protect Seniors and the Medicare Backstop

January 27, 2015 | FAH Hospital Policy Blog Team

Category: Backstop, Medicare

Last week, Senator Marco Rubio of Florida wrote a letter to HHS Secretary Sylvia Mathews Burwell urging her to leave cuts to Medicare bad debt out of the FY 2016 budget. The letter emphasizes the need for sufficient funds to cover Medicare bad debt, a provision of the program often referred to as the Medicare backstop, to help care for and protect Florida seniors.

Even with Medicare coverage, some seniors cannot afford their cost-sharing obligations, which leaves a portion of their hospital care uncompensated. When Medicare was created nearly 50 years ago, the backstop was established as a fundamental component of the program specifically for those seniors who would not be able to pay. The Medicare backstop was built to cover 100% of uncompensated cost-sharing; unfortunately, in recent years Congress has taken advantage of the provision and reduced the Medicare backstop to just 65%, which leaves hospitals on the hook for 35% of uncompensated care.

With a large senior population, Florida is disproportionately impacted by cuts to the Medicare backstop. As Senator Rubio notes in his letter:

“These payments…are critically important to hospitals in my state and across the country…. Cutting these payments is not a solution to the long-term fiscal sustainability of the Medicare program.”

American seniors should not have to worry about whether or not they can afford their cost-share when in need of medical attention—this is the tenet upon which the backstop was built. Further cuts to this foundation of our health care system will impact patient access to care for our most vulnerable citizens who require disproportionately more care at their age. It is critical that we leave the Medicare backstop intact.

The FAH thanks Senator Marco Rubio for standing up for America’s seniors, and his continued support in protecting the Medicare backstop.

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