The 2 percent pending cuts to Medicare payments as a result of the budget sequestration are expected to affect the bottom line of some hospitals to the tune of millions of dollars a year, but a variety of reports suggest hospital finance leaders will be able to cope with the reductions for now.
The sequestration triggered $85 billion in across-the-board cuts to federal spending, including $11 billion to the Medicare program.
Michael Haile, chief financial officer of Faxton St Luke's Healthcare system in upstate New York, rated the cuts as a six on a scale of 10 when they take effect on April 1, reported the Utica Observer-Dispatch. The hospital system prepared for the cuts back in January when it eliminated 10 positions, Haile told the newspaper.
In the Sunshine State, the Florida Hospital Association estimated the cuts will cost its member facilities up to $2 billion over the next decade, the Naples News reported. "The numbers are daunting," FHA President Bruce Rueben told the newspaper.
However, providers such as Lee Memorial Health System factored the potential cuts into their prior year's budgets, according to the article.
In Zanesville, Ohio, the Genesis Healthcare System projects it will lose $900,000 in payments for the remainder of 2013 and $1.2 million for an entire calendar year, according to the Times-Recorder. But because Genesis is considered the sole community provider, its actual reduction will be about 1 percent.
"Any cut is kind of a big deal, but is it a game-changer? Does it change our future strategic plan? No," Genesis Chief Financial Officer Paul Masterson told the Times-Recorder. "It does create an issue for us that we need to continue to be focused on, reducing our internal costs, which we have for years."