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Update on the sequester: Hospitals warn of looming pending cuts

In life 'beyond the fiscal cliff,' facilities should tighten their belts

Topics: Finance

March 20, 2013

In the days since President Obama signed the Budget Control Act to initiate $85 billion in sequestration cuts, U.S. health care groups have continued to warn that they're facing significant hits to revenue.

Earlier this month, the Colorado Hospital Association (CHA) released a report estimating that hospitals should expect more than $2 billion in Medicare payment reductions over the next 10 years—with $359 million resulting directly from the Budget Control Act.

The 17 acute-care hospitals in the Cincinnati area alone will see nearly $62 million in cuts over the next four years, according to a new report from the Greater Cincinnati Health Council. Most of the cuts will come from decreased Medicare reimbursements included in the American Taxpayer Relief Act.

The sequester cuts, coupled with other cuts to Medicare reimbursement, will create new challenges for hospitals, officials warn.

"Colorado is now seeing a greater health care cost shift due to Medicare underpayment than Medicaid—a phenomenon that was unthinkable to many just a few years ago," CHA's president and CEO Steven Summer says (Ritchie, "Cincy Biz Blog," Business Courier of Cincinnati, 3/19; Nothern Colorado Business Report, 3/11).

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