Importance of Striking the Right Balance between Hospital Billing and Medicare Cut


Hospitalist Billing Medical Billing ServicesHospitals are facing challenges due to Medicare cuts and funding changes. As the Affordable Care Act will settle into place in 2014, small rural hospitals will have to face various concerns such as, significant Medicare payment reductions and new payment requirements for patient care.

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Medicare payments cover older people and rural hospitals rely on this for almost 45% of their annual income. Even though federal lawmakers are changing how Medicare money will reach rural hospitals in order to improve healthcare and reduce costs, hospitals will have to make various changes to cope up with this reform.

Impact of Medicare cuts on hospitals:

Not only services but staffing will also have to be changed to increase efficiency in hospitals. More resources will have to be assigned for primary care so that the number of unnecessary hospital admissions can be brought down.

Under the ACA, Medicare payment cuts will ‘bend the curve’, slowing down the growth of operating expenses and total revenues in hospitals.

At a time when rural hospitals are facing tough economics, such changes will create more problems. Compared to their urban counterparts, rural hospitals work on a small scale, operating on small margins. Approximately 40% of hospitals in rural areas operate at a loss and due to Medicare cuts and reduction in patient volumes such hospitals have become vulnerable, financially.

In a span of 10 years, hospitals, nursing facilities and surgical centres will face $196 billion reduction in annual increases in Medicare payments. No matter how the federal funds for Medicare are being received, all rural hospitals will face significant payments cuts in the years to come. It will not only affect the services provided by these hospitals but also change how patients receive care.

What measures need to be taken by hospitals?

In 2014 and 2015, Medicare payments will be based on the quality of treatment received by patients. Hospitals will be gaining or losing 1% of Medicare funding based on 20 factors that gauge quality of care.

New programs will have to be started by hospitals if they wish to protect their Medicare payments. These programs will be required to meet new quality benchmarks and requirements. Hospitals will also have to reduce medical errors. However, such programs can only be afforded by large hospitals with high patient volume. Small, rural hospitals will face difficulties in balancing between patient care, hospitalist medical billing requirements and other administrative tasks.

In an effort to eliminate the headache of billing, coding and to ensure a steady cash flow, many hospitals are seeking help from a medical billing company. has been helping hospitals across the US strike balance between billing and Medicare cuts. We have a team of expert coders and billers who use the latest technology to handle your hospitalist medical billing, compliance to HIPAA and other essential tasks to strengthen your RCM. While we ensure that you get paid on time for all the services offered, you can concentrate fully on providing quality patient care.

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