Today if Congress does not act President Obama will have to issue at midnight a sequestration order specifying a 85 billion spending cut, not only will defense spending be cut but also a 2 % reduction in Medicare reimbursement rates is planned. The Medicare reimbursement rate cuts will have especially a big influence on hospitals in Santa Monica and the rest of the country.

More than 4,200 hospitals nationwide that serve Medicare beneficiaries would lose nearly $3 billion under sequestration, according to an analysis by iVantage Health Analytics, the Miami Herald reports.

The analysis shows that the sequester’s 2% reduction in Medicare reimbursements would result in 73,000 fewer hospital jobs nationwide and cause nearly 100 hospitals to operate at a deficit.

Specifically, the analysis showed:

  • Cedars-Sinai Medical Center in Los Angeles will face an estimated $9 million cut in Medicare reimbursements;
  • Loma Linda University Medical Center in, Loma Linda, Calif., could lose nearly $4 million;
  • The Mayo Clinic Hospital in Phoenix could experience an estimated $2.4 million loss; and
  • Yale-New Haven Hospital in Connecticut could lose an estimated $6.4 million (Pugh, Miami Herald, 2/28).

Meanwhile, some hospitals have prepared for the sequester’s cuts. For example, David Blom — CEO of Ohio Health, a health care system that includes 18 hospitals, 23 health and surgery centers, home-health providers and other facilities — said his company is preparing for a $12 million reduction in Medicare reimbursements by pre-emptively budgeting for the sequester (Carey, Kaiser Health News, 3/1).

Solid Health Insurance Services is keeping you informed on the newest health care related issues.  We are watching closely if Medicare or part of the affordable care act will be influenced by the sequester order of today.