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Medicare News
Medicare Moves to Cut Physician Reimbursements by
5.1 Percent
Specialty hospitals get 3% boost if they report
quality measures
August 9, 2006 – Medicare moved forward yesterday
to finalize their announced plans to cut reimbursements to physicians by
5.1 percent, which has already been challenged in Congress. Physician
groups predict doctors will cut back on Medicare patients they serve,
while at least one government official thinks it will encourage them to
increase their volume. Medicare also announced a pay increase for
specialty hospitals that report quality care measures. The KaiserNet.org
daily report also says Medicare Advantage plans are showing substantial
growth, particularly with private, fee-for-service plans.
 Medicare
Physician Payments To Drop 5.1%, Some Hospital Outpatient Care Rates To
Increase in 2007, CMS Announces
The Bush administration on Tuesday proposed a
federal rule that would cut Medicare reimbursements for physician
services by 5.1% for 2007, the
New York Times
reports.
Administration officials said the cut is necessary
to offset faster-than-expected increases in Medicare spending for
physician services, the Times reports (Pear, New York Times, 8/9).
Medicare reimbursements to physicians increased 10% in 2005, and
reimbursements for physician services and hospital outpatient services
combined are expected to increase 10.6% in 2007, according to the Wall
Street Journal (Zhang, Wall Street Journal, 8/9).
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Medicare May
Trade Physician Pay Cut for Quality of
Care Reports
'Pay-for-performance necessary due to
rapid growth in
spending on Part B'
July 29, 2006 – The tug-of-war between the Centers
for Medicare & Medicaid Services and the American Medical Association
over what Medicare will pay for physician services, took an interesting
turn last week with the suggestion by the CMS administrator that the
government may scrap the reduction the pay rate if the doctors will
agree to providing the data necessary to measure the quality of care.
This could lead to paying individual physicians at rates tied to the
quality of their service.
Read more...
GAO Report Says Physicians Not Likely to Limit
Medicare Patients if Pay is Cut
AMA says up to 45% of physicians may limit practice
if Medicare cuts rates
July 24, 2006 – Just a few days ago the president
of the American Medical Association was on the speaking tour and telling
senior citizens that up to 45% of physicians, according to their survey,
will limit their Medicare patients if Congress does not stop a 5% cut in
doctor's payments scheduled by Medicare. The argument received a strong
counter on Friday from a report by the Government Accountability Office
that there is no evidence to expect this to happen, according to a
KaiserNet.org report today.
Read more...
Medicare Announces Pay Hikes for Home Health Care,
Nursing Homes
July 31, 2006 – Home health agencies will get a 3.1
percent increase in Medicare payments for calendar year 2007, as will
nursing home facilities that furnish certain skilled nursing and
rehabilitation care to Medicare patients recovering from serious health
problems, according to proposals by the Centers for Medicare & Medicaid
Services. Read
more...
Reduction in Medicare Reimbursement to Physicians
May Limit New Patients
AMA President says 45% of doctors will limit
Medicare practice
July
19, 2006 - Forty-five percent of physicians in the
American Medical
Association plan to decrease or stop the acceptance of new
Medicare beneficiaries and
TRICARE
members if Congress does not act to stop a 5% decrease in Medicare
physician payments that is scheduled to take effect in 2007, AMA
President Jeremy Lazarus said on Tuesday, the
AP/South Florida
Sun-Sentinel reports.
Read more...
Perfect Storm Developing Over Changes in Medicare's
Hospital Payment Policy
Some hospital reimbursements
to be reduced 20 to 30
percent
July 17, 2006 – The latest storm engulfing Medicare
is a controversy over changes in the way it will pay hospitals for
services rendered its beneficiaries.
Read
more...
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Medicare
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Medicare Drug Program |
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The government estimates Medicare will pay a total
of $61.5 billion to 875,000 physicians and other providers in 2007.
CMS
Administrator Mark McClellan said the rise in Medicare spending on
physician services is the result of "increases in the number and
complexity of services furnished to Medicare beneficiaries, including
more frequent and intensive office visits, and rapid growth in the use
of imaging techniques, laboratory services and physician-administered
drugs."
According to the Times, the increased spending
"directly affects beneficiaries because their premiums are set each year
to cover about 25% of projected spending" for Medicare Part B, which
covers physician services and other outpatient care.
McClellan said Part B premiums likely will increase
11% to $98.40 for 2007. He said it would cost the federal government $13
billion over five years if Congress acts to block the proposed cuts, as
it has done in past years (New York Times, 8/9).
Hospitals
McClellan also announced a proposed rule that would increase Medicare
reimbursements for outpatient services by 3% for hospitals that report
quality care measures to the government (Wall Street Journal, 8/9).
Medicare reimbursements for outpatient services
performed in hospitals increased almost 12% in 2006, and payments are
expected to increase 9.2% in 2007, McClellan said. He said hospitals
need to provide the government with more data about the services they
provide to beneficiaries because there is no clear evidence that
increased treatments result in better care (Freking,
AP/San Francisco
Chronicle, 8/9).
In addition, the Bush administration announced a
proposal that would require specialty hospitals to provide the
government with information about their "investment and compensation
relationships with physicians."
Hospitals specializing in cardiac, orthopedic or
surgical care would be required to notify patients of any "investment
interest" a staff physician has in the hospital. Hospitals that do not
comply with the disclosure requirements would face civil penalties of up
to $10,000 per day.
CMS officials said physicians who invest in
hospitals could be violating federal law if they receive financial
returns that are disproportionate to their investments (New York Times,
8/9). CMS will accept comments on the proposals for 60 days, the AP/San
Francisco Chronicle reports (AP/San Francisco Chronicle, 8/9).
Comments
McClellan said, "We need to get out of the vicious circle of rapid
growth in utilization and spending and falling real payment rates,"
adding, "I'm very concerned about our current system. I don't think it's
sustainable" (Wall Street Journal, 8/9).
Donald Marron, acting director of the
Congressional
Budget Office, said there is significant evidence to suggest
that "a reduction in payment rates leads physicians to increase the
volume and intensity of the service they perform." He added that some
physicians "are likely to respond to continuing reductions in payment
rates by declining to participate in the Medicare program" (New York
Times, 8/9).
Cecil Wilson, chair of the
American Medical
Association's board of trustees, said, "Seniors who rely on
Medicare and the physicians who care for them are stuck wondering if
2007 will be the year access to care erodes as we wait for congressional
action to stop the Medicare payment cuts."
Wilson said proposals to reduce payments for
imaging services in physician offices could harm beneficiaries' ability
to receive an accurate diagnosis. He added, "It is important to look not
just to the increase in use of such services but to their ability to
provide patients with healthier outcomes, such as using CT scans and
MRIs to pinpoint and stage various types of cancer" (AP/San Francisco
Chronicle, 8/9).
Medicare Advantage Plans, Particularly
Private FFS Plans, Experience Increased Enrollment
USA Today
on Wednesday examined the effects of increasing enrollment in Medicare
Advantage plans. According to data from
CMS and
the consulting firm
Avalere Health,
enrollment in MA plans increased 19% from Dec. 1, 2005, through July 1
to reach 7.3 million beneficiaries.
USA Today reports that enrollment growth had been
especially strong in a type of plan called private, fee-for-service
Medicare plans, which generally have wider provider networks than
conventional managed care plans.
According to USA Today, enrollment in the private,
fee-for-service plans increased 265% from December 2005 through July of
this year, but the plans still represent only a "tiny portion" of total
Medicare enrollment. The increase in private, fee-for-service plan
enrollment accounted for 47% of total growth in MA plan enrollment over
the same period, USA Today reports.
The increase is "pleasing insurers" who offer the
plans, "[b]ut fiscal watchdogs say the plans provide little benefit to
taxpayers," according to USA Today. Congress initially projected that MA
plans would decrease expenditures because of cost control methods used
by managed care plans, USA Today reports.
However, a recent report from the
Medicare Payment
Advisory Commission finds that MA plans cost the government
an average of 11% more than traditional Medicare. Marilyn Moon, a vice
president at the
American Institutes
for Research, said, "There is absolutely [no advantage],
except for the religious fervor that surrounds the notion that the
private sector is better than the public sector."
Karen Ignagni, president and CEO of
America's Health
Insurance Plans, said, "More choice is good news for
beneficiaries" (Appleby, USA Today, 8/9).
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