Hospital billing and the ghost of imminent Medicare-cut impact


As Hospitals, which hitherto could evade the backlash of the Sustainable Growth Rate (SGR) fix, face at an imminent 27.4% reduction to their Medicare fees starting this January unless the Federal Government decides otherwise. Although slightly lower than the initially projected percentage of 29.5, still the eventual reduction will have devastating effect on the clinical and operational sustenance and growth of a majority of healthcare institutions across the U.S.  Hospitals would not have been so serious about this had Medicare been a negligible entity with marginal stake-holding in nation’s health insurance sector.  But, with Medicare accounting for almost half of the U.S. health insurance covering more people than any other private insurance carrier, the fears are quite natural.

While Hospitals search ways for off-setting the imminent erosion of revenues and bottom-lines, Private Insurance Sector seems less likely to compliment their cause as most of the private carriers themselves are into cost-optimization exercises. Whereas Accountable Care Organization (ACO) concept might present a ray of hope at the end of a dark tunnel, it can only expected to reap benefits after a considerable realignment and gestation period, which yet again a matter of resource and time expenditure.

Standing at the crossroads, hospitals will have to make some crucial policy decisions, in terms of:

  • Balancing Medicare patients with non-Medicare patients: Although Hospitals can look to solicit non-Medicare patients, they cannot altogether abandon addressing Medicare beneficiaries as they are bound by the Federal Health Department’s obligation to serve Medicare beneficiaries on priority.  Further, the volume that Medicare beneficiaries provide cannot be matched. Therefore, at the most, hospitals can look find an amicable balance between Medicare and non-Medicare beneficiaries.
  • Overhauling clinical and operational efficiency: Another way of countering the situation is bringing in novel clinical and operational process, based on efficient human and technology fusion. Being open to automated clinical and operational technology, hospitals can substantially reduce operational overheads, resulting in optimization of expenditure and maximization of revenue or profits.
  • Phasing out non-profitable lines through cost-benefit analysis: Last but not the least is the phasing out non-profitable lines through proven cost-benefit analysis can become vital in ensuring sustainable growth rate as dictated by the pulls and push of the healthcare industry.

While these operational strategies seem to be indispensible to hospitals’ countering the impact of the eventual Medicare cuts, expecting them to be single-handedly managed by the physicians alone could be foolhardy. Hospitals, whose prime focus has always been uncompromised quality in medical care, may be ill-equipped to address such turnaround-actions. This is where competent Medical Billing Advisories can be of indispensable value to the hospitals seeking to ride over the imminent ghost of Medicare cuts. ( – reputed for being able to revive a majority of practices on the path of sustenance and growth – prides itself on the proven credentials that can specifically address clinical and operational issues. Its ingenious suite of Revenue Cycle Management – complete with complete with   Patient Scheduling and Reminders, Patient enrollment, Insurance Enrollment, Insurance verification, Insurance Authorizations, Coding and audits, Billing and Reconciling of Accounts, Account Analysis and Denial Management, AR Management, and Financial Management Reporting – should effectively and efficiently counter the impact of the imminent ghost of Medicare cuts.

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