Tax Provision Would Reduce Medicare Payments To Providers

 

Hospitals and small physician practices that obtain a significant amount of their revenue from Medicare reimbursements "stand to be the hardest hit" by a "little-known provision" included in a 2005 federal tax law, the Wichita Eagle reports. Under Section 511 of the 2005 Tax Increase Prevention and Reconciliation Act, the federal government by 2011 must withhold 3% of payments to all businesses that pay taxes and contract with the government. David Busatti, CFO of Wesley Medical Center in Wichita, Kan., said, "You already have physicians unwilling to take Medicare patients or are capping them because of (low) Medicare reimbursements, and this certainly will exacerbate the problem. Then you're talking about a critical access problem ... and sicker patients ending up in the emergency room. Hospitals, especially (rural) hospitals, could end up in very bad shape." Chip Kahn, president of the Federation of American Hospitals, last month testified before Congress that the provision "will require a total overhaul of the local, state and federal government reimbursement systems in order to comply." Lawmakers in both the Senate and the House have introduced bills that would repeal the provision

Source: Tax Provision Would Reduce Medicare Payments To Providers