What’s Happening With the “Fiscal Cliff”? Premier’s Blair Childs Explains

Yes, that’s what most of the discussion is about. The hospitals are obviously already on the hook [for readmissions penalties under the ACA]. The readmissions program [under the ACA] is a flawed policy on a certain level, because for any kind of pay-for-performance program to work, it has to be rewarding or penalizing an organization for something it can control. In the case of the readmissions program, though, one of the major factors affecting patient care organizations is the socioeconomic status of a community. And so we believe you have to segment off from this the population of dual-eligibles [those individuals eligible both for Medicare and Medicaid support]; when you segment them [from the population being analyzed], that’s a fairer proxy. So to be fair, you’d be taking out the hospitals that have high levels of dual-eligible patients.

What other things are you hearing inside the Capitol?

You know, you go and talk to the members of Congress—and I’ve been talking to them in the past few days—and none of them know what’s going on. And these are fairly high-up people. And it’s because this really is a Boehner-Obama conversation [between President Barack Obama and John Boehner, Speaker of the House of Representatives]. And of course, Bohener is talking to McConnell [Mitch McConnell, Senate Minority Leader], and the President is talking to Reed [Harry Reed, Senate Majority Leader], and to a lesser extent, Pelosi [Nancy Pelosi, House Minority Leader]. Last week, I met with someone very senior in the Republican leadership in the House, and he really didn’t know what was going on.

Would you say this is unprecedented?

I would have said in 2011, when they did the sequestration solution  during the debt ceiling standoff, that that was equally unprecedented. And they put together a deal for that, and there was a fallback; and they could even potentially do the same kind of thing here. And if they pitch it to the committees, which I think is very possible, meaning the Congress has to work it out, then we’ll be back in the conflict between the House and Senate.

It just seems as though there’s no way to craft a broad solution to all of this that doesn’t include additional hits to providers. What are your thoughts on that?

I think the easiest cut that legislators can make is a hit to providers. It’s much harder to hit beneficiaries; and the President is very focused on protecting Medicaid expansion. Meanwhile, I don’t know how much of the money in the subsidies to the exchanges might get trimmed; and there’s a lot of money there. There are a lot of places in the ACA where you could find some money. But that becomes a political problem; then again, everything’s a political problem, in this context.

I think the thing that concerns us most is if they do a number of short-term fixes or shortages, such as extending the SGR doc-fix for three months, but then have to come up with a tax reduction or something else within sequestration again, in six months.  Let’s say, for example, that they do a three-month doc fix, and another three-month doc fix, and then another six-month doc fix; with each one of those fixes, they’re going to need to look for revenue [to offset the spending], and each time, hospitals will be vulnerable. And is it a two-, three-, or four-trillion dollar deal to get everything done? And there, they could potentially address the SGR, as well as a variety of other changes, some of which could affect hospitals. Really, the best thing would be if they could reach a deal now; the worst case would be if they took these incremental steps, and hospitals got hit, and then got hit again in the final, longer-term package.

Is there anything people should watch for to happen in the next couple of weeks?

The white smoke from the chimney! [laughs]We all know what issues are on the table for hospitals, and there are any number of potential actions. But there are all these decisions to be made, including what they do about the debt ceiling.

And every hospital should be communicating to their lawmaker now about what these cuts might mean to them.