Traverse City Record-Eagle

Archive: Thursday

December 12, 2013

Budget deal would extend Medicare cuts

TRAVERSE CITY — Munson Healthcare would have to endure an additional two years of Medicare sequester cuts under a deal unveiled by lead budget negotiators for the Senate and House.

Munson already faces a decade of 2 percent sequester cuts in Medicare, a government health insurance program for the elderly.

This deal would extend the cuts to 2023, two years beyond what was established in the Balanced Budget Control Act of 2011.

Munson’s top chief said it is too early to speak about employee or patient ramifications.

“There isn’t any specific legislation approved yet,” said Ed Ness, president and chief executive officer of Munson Healthcare. “When we get a specific impact to our various hospitals and start our budgeting process for next year in February, we’ll quantify these changes and look at building them into next year’s budget,”

Ness said that each year of the 2 percent sequester translates into a $3.5 million revenue loss for Munson, which has about a 55 percent Medicare patient population.

In addition to the sequester, Munson also must contend with $150 million in collective Medicare cuts over 10 years, triggered by the Affordable Care Act, Ness said.

“This isn’t new. Two years ago, we reduced expenses by $10 million and last year by $15 million, in large part because of these changes,” Ness said. “Our approach is to plan for this and be proactive, assuming it will happen. If we do it systematically, it doesn’t look like a big crisis where you have to do something dramatic.”

House Budget Committee Chairman Paul Ryan, a Republican, and his Senate counterpart, Democrat Patty Murray, announced the plan on Tuesday.

Top Republicans and President Barack Obama are lining up behind the modest U.S. budget agreement that restores about $63 billion in automatic spending cuts from programs ranging from parks to the Defense Department.

Text Only