How the tax code could cure what ails healthcare

February 25, 2012

Discover how the tax code could make uncompensated/undercompensated care a thing of the past.

BILLIONS IN UNCOMPENSATED CARE

Under current tax and accounting practices, the cost for this uncompensated care is paid for out of physicians' practice earnings. As reimbursements drop, the ability of doctors to earn additional revenue to offset uncompensated care costs diminishes, creating a situation where physicians must decide whether they can continue providing this medical care.

This dilemma will only be exacerbated, as noted on page 14 of a March 2010 Congressional Budget Office letter to Nancy Pelosi, then speaker of the House of Representatives. Without the power of the Independent Payment Advisory Board to reduce reimbursements, combined with the proposed 27% sustainable growth rate reimbursement cut and $500 billion in Medicare cuts, the PPACA, as written, is fiscally unsustainable. Reimbursements will continue to fall as more Americans enroll in Medicaid, Medicare cuts increase, accountable care organizations begin squeezing the savings out of every dollar, and undocumented residents obtain care at emergency rooms under the Emergency Medical Treatment and Active Labor Act. As a result, doctors will be inclined to see fewer, if any, uninsured patients or patients whose care is covered by Medicaid or Medicare.