Schumer: Unwise Cuts Would Be Giant Step Backwards For Patient Care In Upstate NY

OSWEGO, NY – U.S. Senator Charles Schumer called on Congress to reject legislation that would cut Medicare funding for Upstate NY hospital clinics by $494 million over the next 10 years.

The plan under consideration would severely restrict patient access to health care services throughout the state. On Dec. 13, the House of Representatives passed H.R. 3630, which included extremely damaging cuts to hospitals, including a significant Medicare hospital outpatient payment cut. The House passed bill would cut payments for hospital outpatient clinic evaluation and management (E&M) services – among the most common outpatient services clinics provide – by just under $1 billion statewide over 10 years. The legislation is currently being considered by a conference committee of House and Senate members, before the bill is finalized and voted on again by both chambers and sent to the President. Schumer urged the conference committee members to remove the provision that could be devastating to upstate hospitals throughout the state.
“Hospitals in rural and urban areas across the state bend over backwards to meet the health care needs of Upstate New York,” said Schumer. “These cuts would pull the rug right out from underneath them, and I will do all I can to beat it back. These Medicare funds help our doctors and nurses provide top notch care from the Hudson Valley to the North Country all the way to Western New York. We don’t need to rob Peter to pay Paul to ensure that providers are paid appropriately by Medicare. I strongly urge my friends in the House and Senate to abandon these draconian cuts and protect Upstate New York’s hospitals.”

The impact to Oswego Hospital would be $2,076,000, according to the senator’s figures.

“Oswego Health is grateful to U.S. Senator Charles Schumer and Congressman William Owens as they attempt to protect the Medicare patients of Oswego County from these severe cuts,” said Oswego Health President and CEO Ann C. Gilpin. “We understand that a Conference Committee of House and Senate members is considering final legislation that could significantly reduce the payments to hospital outpatient clinics.”

“If approved by members of both Houses and the President, these cuts could be devastating to the continued operation of Oswego Hospital’s outpatient clinic services,” Gilpin continued. “It would also make the ongoing efforts to recruit needed primary care physicians to these clinics more difficult. The estimated impact of this Medicare cut would be $1.8 million over 10 years.”

The House-passed bill would, among other provisions, temporarily fix Medicare’s physician payment Sustainable Growth Rate (SGR) formula, but it would do so by cutting payments for hospital outpatient clinic evaluation and management (E&M) services by $6.8 billion nationwide. The cuts in New York, which would take effect immediately, would total $988 million across the state in the next decade. The House proposal uses these funds to prevent a 27.4% cut in the Medicare physician reimbursement rate, replacing it with a 1% payment increase for 2012 and 2013.

Rather than financing a short-term solution by severely cutting Medicare funding from New York hospitals, Schumer is urging his colleagues in the House and Senate to permanently fix the Sustainable Growth Formula so that seniors can continue to rely on Medicare and their physicians.

Congress has provided temporary relief from the SGR cuts since 2002, but a long-term solution is critical.
The Medicare clinic funding at risk, known as evaluation and management (E&M) services, reimburses services that are among the most common outpatient health care provided, and the cuts would devastate already financially-fragile hospitals and impair access for the patients they care for. Often times, hospital clinics are the only place where Medicare patients can access physicians who accept Medicare or will see uninsured or under-insured patients.

In fact, in many rural communities throughout Upstate the only physician services available to any patient are through the hospital clinic. Schumer today announced his opposition to these cuts that could eliminate access to care for some New Yorkers who have no other place to go. If hospitals are not adequately reimbursed for these services, some could be forced to turn away Medicare patients or close altogether.
Medicare reimbursements for outpatient services, including those provided in a clinic or in a physician office, already fail to cover the full cost of providing that important care, reimbursing only 90 cents for every dollar of care provided. Over the course of the last decade, New York hospital outpatient departments have lost money while providing E&M services and these cuts would worsen an already serious problem. Evidence suggests that hospital-based physicians deliver more cost effective and clinically effective treatment given the opportunities for efficiencies of infrastructure such as health information technology, uniform standards of clinical care, and stricter quality processes.

“These funds are key to making sure hospitals in Upstate’s rural, suburban, and urban areas can continue to provide the health care services New Yorkers deserve,” continued Schumer. “We need to fix the Medicare reimbursement rate, but we can’t do it on the backs of New York hospitals.”