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Congressional Accord Preserves Medicare Doctor Pay

Posted by Matthew Smith on Jan 2, 2013 1:58:00 PM

US CongressThe final Congressional Accord deal averts (for one year) a 26.5% cut in payments to doctors who treat Medicare patients. It also repeals the long-term care provision of the 2010 health overhaul.

The Wall Street Journal: Senate Cliff Bill Would Avert Cuts For Doctors
The Senate’s fiscal cliff package would avert a steep cut in payments to doctors and officially wipe out a contentious piece of the health overhaul law. The bill would delay for one year a cut in reimbursements to physicians who treat patients on Medicare, the federal insurance program for the elderly and disabled. The cost: $25.2 billion (Adamy, 1/1).

The New York Times: Insurance Program Is Cut To Help Reach An Accord
The bill, the American Taxpayer Relief Act, also freezes Medicare payments to doctors, which otherwise would have been cut by at least 26.5 percent in 2013. The Congressional Budget Office said the freeze would cost $25 billion over 10 years, with most of that coming in 2013-14. Congress offset the cost with changes in Medicare and other federal health programs. For example, it reduced Medicare payments to hospitals by $10.5 billion over 10 years after finding that many hospitals had increased their Medicare revenue by describing the severity of patients' illnesses in more detail (Pear, 1/1).

Kaiser Health News: 'Doc Fix' In 'Fiscal Cliff' Plan Cuts Medicare Hospital Payments
The bill would require that, over the next decade, hospitals pick up nearly half of the approximately $30 billion cost of stopping a 26.5 percent payment cut for Medicare physicians, scheduled to begin today (Carey, 1/1).

Roll Call: Cuts To Some Medicare Payments Provide Offsets For 'Doc Fix'
The Senate-passed fiscal cliff bill would block for one year a scheduled 27 percent cut in reimbursements for Medicare physicians, paid for by familiar cuts and adjustments to other provider payments. The bill (HR 8) would keep reimbursement rates steady through Dec. 31, 2013 — providing one more in a series of short-term patches for the Medicare physician payments (Ethridge, 1/1).

Modern Healthcare: House OKs Bill To Avert Fiscal Cliff, Doc Pay Cut 
The House of Representatives late Tuesday approved the Senate's last-minute fiscal cliff package (PDF) that staves off a sharp Medicare physician pay cut by cutting billions from other Medicare providers, including hospitals, pharmacies and dialysis clinics (Zigmond, 1/1).

Politico Pro: Health Care Cuts Send Ripple Through The Industry
The potential fiscal cliff deal … squeezes health savings from a variety of places. But spreading the pain around didn’t prevent complaints from rippling through the industry and Congress. Hospitals are protesting the loudest, since about half of the agreement’s $30 billion in health care cuts would fall on their backs — and most of that $30 billion would go to preventing doctor Medicare pay cuts from kicking in under SGR this month. But insurers and pharmacies are irked as well, since some of the savings would come from trimming payments to Medicare Advantage plans and reimbursements for diabetes tests (Cunningham, 1/1).

Medpage Today: 'Fiscal Cliff' Bill Passes, Medicare Cuts Averted
The 26.5 percent cut in Medicare reimbursement mandated by the sustainable growth rate (SGR) formula was averted in a literal 11th hour vote Tuesday in the House of Representatives. The House vote to pass the "fiscal cliff" bill ok'd earlier by the Senate delays the SGR cuts for a year and pushes back another 2 percent cut for two months. The bill cleared the House by a vote of 257-167; senators had passed the same bill in an 89-8 vote just after 2:00 a.m. vote. Between the SGR and sequestor, doctors were facing a 28.5 percent in Medicare payments scheduled to take effect Tuesday (Pittman, 1/1).

Roll Call: Long-Term Care Provisions Would Be Repealed In Fiscal Cliff Bill
The bill to avert the fiscal cliff would repeal a suspended program in the 2010 health care law that has long been targeted by Republicans. ... Most Democrats resisted, saying the program needed to remain on the books so it could be improved and replaced. But the fiscal cliff bill (HR 8) would fully repeal the Community Living Assistance Services and Supports (CLASS) Act and put a commission on long-term care in its place. Including the provision is a victory for Republicans, who have been concerned that the administration could bring the program back in a form they would oppose (Ethridge, 1/1).

via Kaiser Health News

Topics: Medicare, Hospitals, Fiscal Cliff

"Doc Fix" in Senate Plan Cuts Medicare Hospital Payments

Posted by Matthew Smith on Jan 1, 2013 9:33:00 PM

Medicare BillLegislation passed by the Senate early Tuesday to avert the dreaded “fiscal cliff” would stop a scheduled payment cut in Medicare physician payments. But hospitals, which have to bear a major part of financing for that “doc fix,” are not happy.

The bill would require that, over the next decade, hospitals pick up nearly half  of the approximately $30 billion cost of stopping a 26.5 percent payment cut for Medicare physicians, scheduled to begin today.

The 26.5 percent reduction for doctors comes from a payment formula created in a 1997 deficit reduction law. For the first few years, doctors received modest pay increases. But in 2002, doctors reacted with fury when they came in for a 4.8 percent pay cut under that plan. Every year since, Congress has staved off the scheduled cuts.

The Senate package would reduce hospital payments in two ways. First, it would cut $10.5 billion from projected Medicare hospital payments over 10 years for inpatient or overnight care through a downward adjustment in annual base payment increases. The Senate measure also would reduce Medicaid disproportionate share payments to hospitals by an additional $4.2 billion over the next decade. These cuts are on top of those made to hospitals as part of the 2010 health care law.

Groups representing hospitals said the new plans for reductions will hurt their ability to care for patients.

“While fixing the physician payment formula is essential, it should not be done by jeopardizing hospitals’ ability to care for seniors and their communities,” Rich Umbdenstock, president and chief executive officer of the American Hospital Association, said in a written statement.

Chip Kahn, president and CEO of the Federation of American Hospitals, also expressed dismay that hospitals funded much of the Senate-passed doc fix. “It is not in the best interest of patients or those who care for them to rob hospital Peter to pay for fiscal cliff Paul,” he said.

The Senate bill passed in the early morning hours also would continue a number of Medicare policies known as “extenders.” Those extenders include a wide variety of policies, including  special provisions for some low-volume hospitals and charges for ambulance and physical therapy costs.

Other items in the Senate package that would finance the “doc fix” and Medicare extenders include rebasing bundled payments for end stage renal disease (saves $4.9 billion), implementing competitive bidding for diabetic test strips purchased in retail pharmacies (saves $600 million) and reducing risk-adjusted payments to Medicare Advantage plans ($2 billion).

Whether the House will act on the Senate passed package is unclear.  In addition to the physician payment fix, the bill alters tax rates and delays a series of automatic cuts in federal spending, called sequestration, scheduled to go into effect Jan. 2. That includes a 2 percent reduction to physicians and other Medicare providers – including hospitals.

While seniors would see no changes in their benefits under “sequestration,”  Medicare providers will face $11 billion in cuts through the end of the government’s fiscal year on Sept. 30. For doctors who take Medicare patients, that would be an additional 2 percent reduction on top of the 26.5 percent scheduled Medicare payment cut, if it is not “fixed” by then.

via Kaiser Health News

Topics: Medicare, Hospitals, Fiscal Cliff

The Fiscal Cliff: 6 Questions About its Impact on Medicare & Medicaid

Posted by Matthew Smith on Dec 10, 2012 4:54:00 PM

Fiscal CliffThe impending "fiscal cliff" is a package of automatic spending cuts and tax hikes set to kick in next month unless President Barack Obama and Capitol Hill agree on a way to stop them.

Negotiations to avert the cuts are ongoing and both sides have exchanged offers. The president and congressional Democrats have said they will reduce spending on entitlements, including Medicare, if Republicans will agree to increase tax rates on the highest earners. While Republicans have agreed to more revenue, they oppose increasing tax rates, preferring to focus on closing loopholes and eliminating some deductions.

Here are a few questions and answers about what could happen in the weeks before the end-of-year deadline.

Q: If no deal is struck, how would that affect Medicare patients as well as the hospitals and physicians and other providers who care for them?

A: Under the series of automatic spending cuts known as "sequestration," Medicare providers would be subject to an across-the-board 2 percent payment cut, or $11 billion in fiscal 2013.  According to a September report from the Office of Management and Budget, hospitals would bear the largest share of the cuts, with payments reduced by about $5.8 billion.

Seniors would see no changes in their benefits.

Q:  How does that 2 percent cut in payments to physicians affect the 27 percent cut in Medicare payments to doctors already scheduled to occur in January? 

A: Physicians who accept Medicare patients would face the 2 percent cut on top of an already scheduled 27 percent reduction in January unless Congress steps in to stop it.

That payment formula was created in a 1997 deficit reduction law that called for setting Medicare physician payment rates through a formula based on economic growth. It’s known as the "sustainable growth rate" (SGR).

For the first few years, Medicare expenditures did not exceed the target and doctors received modest pay increases. But in 2002, doctors reacted with fury when they came in for a 4.8 percent pay cut. Every year since, Congress has staved off the scheduled cuts. But each deferral just increased the size – and price tag – of the fix needed the next time.

A deal on the SGR could be part of a "grand bargain," if congressional fiscal cliff negotiators decide to include it. To that point, Obama’s offer to Republicans included $25 billion to stop the scheduled cut. Congress could also pass separate legislation to stop the cuts. Some doctors say that if Medicare reimbursements are further reduced they may stop accepting Medicare patients.

Q: If negotiators do reach a deal, what could that mean for Medicare?

A: It depends on how large a role Medicare plays in a broader deal.  Some of the proposals include raising Medicare's eligibility age to 67, asking wealthier Medicare beneficiaries to pay more for their coverage and paying Medicare providers less. All are complicated and many Democrats have said that they do not want to make changes that harm beneficiaries or shift costs from the government onto seniors.  Republicans are insisting that entitlement savings play a large role in any deficit reduction deal.

Q: How is Medicaid affected, either way?

A: Medicaid does not face any automatic cuts starting Jan. 1.  The Supreme Court's ruling made the health law’s Medicaid expansion optional for states, so there’s concern that any reductions in federal Medicaid spending might make governors even more reluctant to expand the federal-state program.

Many Republicans, including GOP presidential nominee Mitt Romney and his running mate, Rep. Paul Ryan, R-Wis., favor changing Medicaid into a block grant, where states are given a set amount of money and more freedom to decide who is covered and what benefits they would receive. But the block grant concept is a non-starter with Obama and Democrats.

Q: If no deal is reached by Jan. 1, what happens to federal funding for medical research?

A:  The National Institutes of Health would see a $2.5 billion reduction in 2013, which means that the agency would "have to halt or curtail scientific research," according to the OMB analysis. Other agencies would see cuts, too. For example, the Centers for Disease Control and Prevention would face cuts of $490 million, and the Food and Drug administration would see reductions of about $318 million.

Q:  If no deal is reached, what happens to health care for members of the military and veterans?

A: The TRICARE program for active members of the military system would also face an across-the-board 2 percent cut. The Veterans Affairs health system, however, is exempt from sequestration.

Q&A courtesy of Kaiser Health News.

Topics: Medicare, Medicaid, Fiscal Cliff, Tricare

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