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December 31, 2012 – Fiscal Cliff

December 31, 2012 | Comments Off on December 31, 2012 – Fiscal Cliff
Posted by Frank Ciesla

This blog is not intended to address all the issues surrounding the fiscal cliff but just to comment that as of today, December 31, 2012, there is not a resolution of the problem.  As set forth in a recent AP article, this creates potential reduction in payments to health care providers in various ways.  In addition to the fiscal cliff issues, the sustainable growth rate, which we have commented on in many previous blog posts, continues to confront the medical profession.  As of January 1, 2013 (tomorrow), unless resolved (or more likely, kicked down the road for a year), certain health care providers will confront an approximate 27% reduction in reimbursement from the Medicare Program.

If this issue is not quickly resolved, it is likely that many health care providers will terminate their relationships with their patients.  For New Jersey physicians, this means they will need to comply with the regulations of the New Jersey Board of Medical Examiners regarding termination of physician-patient relationships.  N.J.A.C. 13:35 -6.22.

As to hospitals in New Jersey, they must provide care irrespective of the payor and obviously the reimbursement received from that payor.

In an interesting book by Bob Woodward of Watergate fame, “The Price of Politics,” in discussing the last fiscal crisis, he clearly sets forth that the position of the democratic party is not to reduce the benefits to Medicare beneficiaries, and not to increase the cost to Medicare beneficiaries, but to reduce the payment to providers for services provided to Medicare beneficiaries.  If this approach results in the withdrawal of providers from Medicare, it is difficult to predict the magnitude of the ultimate impact on Medicare beneficiaries.

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