Brian M. Foley was quoted by Modern Healthcare in a recent article about federal budget cuts resulting from sequestration and the effects on hospitals.

According to Mr. Foley, the 2% reduction in premium payments from the government to Medicare Advantage Organizations cannot be passed on to  hospitals and other providers, automatically.  The effects of the reductions are controlled by the language in the contracts between the Medicare Advantage Organizations (MAOs) and the providers.  Some contracts do not allow for the reductions to be passed on to the providers, yet some MAOs are attempting to do just that.  With so many hospitals and other providers across the country reporting similar issues, hundreds of millions of dollars are at stake.  Absent further consideration from the MAOs or additional guidance from the Centers for Medicare and Medicaid Services (CMS), the only alternative for the providers is litigation.