Congress has been squeezing federal payments to hospitals since 2010, both through direct payment cuts and through funding bills that often sought to recoup money even when Congress ostensibly made any increase or adjustment. The result is a projected loss of more than $218 billion in hospital reimbursement from 2010-2028 in addition to cuts made as part of the Affordable Care Act (ACA), according to a report commissioned by the Federation of American Hospitals and the American Hospital Association (AHA).
The study arrived at this number by exploring the combined effects of 11 pieces of legislation after the ACA, as well as regulatory changes implemented by the Centers for Medicare and Medicaid Services. Some of the biggest drivers of the payment reductions are familiar, such as sequestration.
Sequestration originated in 2011 and made 2% cuts across the board to federal programs. However, Congress has continued to expand and prolong these cuts through bills in 2013, 2014, 2015, and 2018, totaling an estimated $73.1 billion over the 2010-2028 time frame, the report found.
Hospitals also took significant hits from more arcane regulatory changes to coding, billing, and debt collection that, together, are even greater than nearly a decade of sequestration and amount to more than $79 billion.
“Medicare margins have hit a 10-year low and almost a third of hospitals now have negative aggregate margins across all payer types,” AHA president and CEO Rick Pollack said in a statement about the report. “Additional reductions will create challenging and potentially unsustainable financial circumstances that could adversely impact patients’ access to care and the ability of hospitals to provide services.”
AACC Voices Concern on Proposed Laboratory Developed Test Regulation
AACC joined a group of physician and laboratory groups calling for Congress to reconsider proposed legislation that would create a new entity within the Food and Drug Administration (FDA) to regulate in vitro diagnostics. Called the Diagnostic Accuracy and Innovation Act (DAIA), the law would codify FDA oversight over all laboratory developed tests (LDT).
In a letter to congressional leaders, the organizations make the case that, as it stands, the proposed legislation “generates a new regulatory environment that would overburden and stifle clinical laboratories and medical professionals’ ability to provide laboratory testing to patients.” In addition, Congress would be undermining its own support for precision medicine, the authors contend. “DAIA would sharply curtail medical innovation, which is contradictory to the overwhelming bipartisan support for the 21st Century Cures Act to advance precision medicine. Precision medicine is dependent on precision diagnostics—the field of medicine that DAIA is likely to freeze in place,” the letter said.
The group is advocating for CLIA modernization under the Centers for Medicare and Medicaid Services (CMS), since CMS oversight of LDTs is the most streamlined and cost-effective approach to oversight of LDTs. CMS regulation is the “least disruptive and burdensome approach to addressing clinical and analytical validity, transparency, and other concerns expressed by interested stakeholders.”
Joining AACC in signing the letter are 16 professional associations, laboratories, and universities, including the American College of Medical Genetics and Genomics, the American Medical Association, the Association for Molecular Pathology, the Association of Public Health Laboratories, BioReference Laboratories, and the Infectious Diseases Society of America.