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UIHC could face $5.3 million Medicare cut

BY DORA GROTE | OCTOBER 27, 2011 7:20 AM

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The University of Iowa Hospitals and Clinics could experience substantial funding cuts if Congress' "Supercommittee" fails to agree upon a plan to cut the federal deficit, UI Health Care officials said at the state Board of Regents meeting Wednesday.

And though there's still a possibility for no cuts, UIHC departments are looking for ways to adjust to the lower budgets, officials said.

The Supercommittee has been tasked with coming up with a package of $1.5 trillion in spending cuts over the next 10 years.

UI Vice President for Medical Affairs Jean Robillard called the cuts "somewhat speculative."

"[Federal spending] could not be cut at all, and we would have an increase in taxes, but that is unlikely," he said. "It could be a large cut, but that is unlikely … These are made on the premise that nothing will happen, and it will be $1.2 trillion."

If the Supercommittee doesn't develop a plan, UIHC could see a $5.3 million cut in Medicare and lower funding in graduate medical medication payments — which help fund the accredited residency programs at a cost approximately $30 million per year.

Additionally, a lack of resolution would cause an automatic 2 percent across-the-board spending cut, effective Jan. 15, 2012 — cutting approximately $1.2 trillion in the next 10 years.

Robillard said officials need to explain the challenges the automatic cuts would present to the UIHC. 

"Departments are looking at their budget to at least face that [cut] and continue to deliver service and continue to have the bottom line," Robillard said.

He said if there were cuts in Medicare, physicians could see a 29.4 percent cut in reimbursements — $780,000 per year.

The reduction in graduate medical payment funds could also affect the workforce in the state, said the Dean of the Carver College of Medicine Paul Rothman.

He said graduate medical payments help compensate costs directly related to residents' education, salaries, supervising, and administrative costs and are funded by not Medicare alone.

If these costs are cut, UIHC will have a difficult time maintaining its level of training.

"It is very important because if people train here and do residency and fellowship here, they are more likely to stay here to practice," Rothman said.

He said Iowa houses 123 graduate medical education programs, 106 of which are at the UI, 13 of which are partly affiliated with the UI, and four of which are independent.

"If we have threats because of cuts, we are going to have issues training the workforce in the state," Rothman said.

Rep. Mary Mascher, D-Iowa City, said the cuts — if they occur — would be detrimental to the entire nation.

"If [Supercommittee members] cannot come to a compromise, both Republicans and Democrats can agree on and pass, they've determined these programs including education, health care, and human services and the military will be cut," Mascher said.


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