Budget agreement would cut some hospital-based outpatient payments

But most existing payments grandfathered in during negotiations
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A rare bipartisan budget agreement reached in Congress makes it likely that there will be no government shutdown over spending issues. But hospitals say they are shut out.

The Senate approved the agreement early Friday morning and sent it to President Barack Obama for approval, according to U.S. News & World Report. The agreement passed the House late Wednesday. 

The two-year agreement would automatically raise the debt limit until early 2017, The Washington Post reported.

In its general outline, the budget increases some domestic and military spending, but it also includes many automatic cuts. Among them are reductions in Medicare payments for hospital-owned outpatient centers. Payments would have to be at the lower outpatient fee schedules for physician offices and clinics. However, Bloomberg has reported that the reductions would only be for new acquisitions; medical practices and clinics previously acquired or opened by hospitals would continue to be reimbursed at the higher rates.

That was a compromise from the original Obama administration proposal of capping all outpatient care delivered at hospital sites at the lower rates. Ipsita Smolinski, a managing director at Capitol Street, told Bloomberg that it's "not as bad as it could have been."

Nevertheless, the Hospital Association of New York State has taken exception to the proposed cuts, telling its membership in a letter that it "has long fought against such so-called site-neutral cuts that would reduce reimbursement for necessary services, resulting in restricted access in many communities where physician services are often only available through hospital-based clinics," Politico New York reported. The Greater New York Hospital Association also objected, with CEO Kenneth Raske telling Politico New York that "we will continue to oppose this provision, and continue to protect our hospitals' ability to provide high-quality patient care, with every resource at our disposal."

However, the proposal would also avert a 52 percent increase in Medicare Part B premiums that would go into effect next year, with such a steep uptick scheduled in part because there was no cost of living escalator planned for Social Security payments. That put tremendous pressure on lawmakers to try an avert such a steep increase in premiums.

To learn more:
- read the Politico New York article 
- here's the Washington Post article 
- check out the Bloomberg article
- read the U.S. News & World Report article

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