Kevin Downey, Colorado Hospital Association
(720) 330-6019

More Medicare Cuts: New Federal Budget Agreement Could Reduce Health Care Access for Thousands of Coloradans

Date Dec. 30, 2013

GREENWOOD VILLAGE, COLO. (Dec. 30, 2013) — Colorado hospitals face yet another round of new Medicare payment reductions, this time estimated at approximately $90 million statewide as a result of the Bipartisan Budget Act passed earlier this month in Washington. Provisions in the act include extending Medicare payment cuts under the Budget Control Act (a.k.a. “sequestration”) two more years, until 2023 instead of 2021.
This marks the latest in a series of unexpected Medicare payment cuts mandated by Congress that continue to threaten the financial stability of many Colorado hospitals. Rural communities will be especially impacted by this action. A Colorado Hospital Association (CHA) analysis in March 2013 found that Colorado hospitals were already facing more than $2 billion in Medicare cuts over 10 years, equating to a nearly 10 percent reduction in Medicare revenue. While some of these cuts were expected under the 2010 Patient Protection and Affordable Care Act, approximately $700 million worth of Medicare payment cuts to Colorado hospitals have been incurred since then via additional congressional actions. In 2012, Colorado hospitals received $257 million less for providing care to Medicare patients than in 2009.
“This trend is not only troubling, but also unsustainable for some of our hospitals in the long run,” said Steven J. Summer, CHA president and chief executive officer. “We’re gravely concerned that this could result in longer wait times, reduced access and even the end of some vital health care services in Colorado communities with higher percentages of Medicare patients. The federal government simply can’t keep balancing its books on the backs of hospitals and the patients they serve without significant societal repercussions down the road.”
A recent study by the Center for Studying Health System Change links Medicare cuts to reduced access to health care. Published in the October 2013 edition of Health Affairs, the analysis focused on Medicare prices and hospital utilization in 10 states from 1995 to 2009. The results suggest that “Medicare price cuts lead hospitals to reduce capacity and provide fewer services to the elderly,” wrote the researchers. “Hospitals do not appear to leave beds empty in response to Medicare price cuts. Instead, they appear to reduce their scale of operations by shutting down beds.”

About the Colorado Hospital Association
The Colorado Hospital Association (CHA) represents 100 member hospitals and health systems throughout Colorado. CHA partners with its members to work towards health reform and performance improvement, and provides advocacy and representation at the state and federal level. Colorado hospitals and health systems are committed to providing coverage and access to safe, high-quality and affordable health care. In addition, Colorado hospitals have a tremendous impact on the state’s economic stability and growth, contributing to nearly every community across the state with 72,000 employees statewide.