Community hospitals are at the center of the reimbursement changes driving changes in the delivery of care. On April 1, 2013, the Centers for Medicare and Medicaid Services (CMS) will cut Hospital Periodic Interim Payments (PIP), Critical Access Hospital (CAH) and Cancer Hospital interim payments, and pass-through payments for Graduate Medical Education, Organ Acquisition, and Medicare Bad Debts by 2%. This 2% cut is an addition to the 1% cut that was initially instituted for acute care hospitals under the American Taxpayer Relief Act which was intended to correct the fiscal cliff in January. This additional 2% cut is due to the sequestration cuts that automatically go into effect. Many hospitals rely upon the PIP payments from Medicare to be able to cover costs and often times provide funds for day-to-day operations. Accordingly, on Monday, hospitals will be suffering a 2% cut on their operating revenues.
In addition to the CMS budget cuts, the third-party insurance