Daily Editors' Notes

Regardless of fiscal cliff outcome, funding cuts loom

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John O'Connor
John O'Connor
We're hearing much out of Washington these days about the looming fiscal cliff. Assessments about its impact run the gamut from no big deal to very big deal. As is usually the case, the truth is probably somewhere in between.

Finding a way to prevent the $607 billion or so in tax increases and spending cuts soon scheduled to take effect will require a serious commitment from both Democrats and Republicans. For their part, long-term care groups want to make sure their concerns become a part of the discussion as well.

Almost immediately after the election, the American Health Care Association launched a second installment of a television, print and radio ad campaign. The implicit message to lawmakers: Medicare cuts are not just going to hurt providers. Residents – many of whom may be deciding to vote for you in the next election – will also be affected.

At the same time, LeadingAge has posted a letter template its members can send to Congress. The letter also addresses the unpleasant consequences of a 2% Medicare funding cut.

By the usual looming catastrophe standards, it's still early in the game. Even now, we're mostly hearing Democrats and Republicans gush about how productive discussions have been. But even if the fiscal cliff is averted, providers may not feel much like celebrating. Why? Let me point out three possible reasons:

Provider tax reductions? This appears likely even if the fiscal cliff is averted. The president's fiscal 2013 budget would reduce how much tax states can charge providers. Over 10 years, that could surpass $50 billion in savings.

Block grants after all? Thought they were dead, right? Think again. Under an alternate plan put forward by Rep. Bill Cassidy (R-LA), states would get fixed payments on a per capita basis. That way, they would not be hurt if the economy stalls or if more eligible people move in.

More bad debt limits? Congress has already trimmed the amount that the federal government will reimburse nursing homes when Medicare beneficiaries don't pay out-of-pocket costs. But deeper cuts appear to be a real possibility.

Our lawmakers might call these savings. But from a provider's perspective, they mean reduced payments. And yes, they could be included in a package that purports to prevent Medicare funding cuts.

You can draw your own conclusions about Washington and the current state of irony.

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Daily Editors' Notes

McKnight's Daily Editor's Notes features commentary on the latest in long-term care news. Entries are written by Editorial Director John O'Connor on Monday and Friday; Staff Writer Tim Mullaney on Tuesday, Editor James M. Berklan on Wednesday and Senior Editor Elizabeth Newman on Thursday.

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