The American Hospital Association has reached an agreement with the Obama Administration on a "framework" for reimbursement concessions and other key changes that could help achieve national healthcare reform. The agreement involves a hospital commitment of $155 billion in Medicare and Medicaid savings over the next 10 years to cover to help cover the cost of reform.
In a July 8 statement, AHA President and CEO Rich Umbdenstock, Sister Carol Keehan, president and CEO of the Catholic Health Association of the United States, and Chip Kahn, president of the Federation of American Hospitals, said they support proposals to set restrictions on physician self-referrals to hospitals in which they have an ownership interest. They also said they support proposals to simplify administrative red tape.
The agreement also involves cuts to the disproportionate share programs that help hospitals care for the uninsured and underinsured and support important community resources, but these cuts would not be reduced until 2015 and reductions would only occur if coverage expansions actually took place. Roughly 60 percent of the existing DSH payments would be preserved to support "our nation’s safety net," the hospital leaders said.
Umbdenstock, Keehan and Kahn said they would not support cuts to funding that teaching hospitals rely upon to train the next generation of physicians.
Umbdenstock said the discussions have yielded progress on key hospital issues such as reimbursement for readmissions and bundling of post-acute payments. He stressed that any major change will require a long phase-in period.
He also said any successful plan would require a "balanced approach," with "everyone playing a part to make health reform happen."
AHA Executive Vice President Rick Pollack said the organization hopes to set a cap on the amount of reductions hospitals would have to shoulder, and suggested that hospitals would look for agreements on some of the other key provider issues.
Vice President Joseph Biden, Health and Human Services Secretary Kathleen Sebelius and representatives of the hospital industry announced the agreement from the White House on July 8. Biden called it "yet another step towards ensuring reform will be deficit-neutral and a key to long-term fiscal sustainability."
"As more people are insured, hospitals will bear less of the financial burden of caring for the uninsured and the underinsured,” he said, “and we'll reduce payments to cover those costs, in tandem with that reduction."
"We have these hospitals working with us, and we have the pharmaceutical industry working with us. We have doctors and nurses and health care providers with us. We have the American public behind us. And everyone sees that we need change," he added.