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Senior Citizen Politics
Medicare Will See Big Changes if Bill Offered in
Senate by Finance Chair Baucus Gets Passed
Gives docs pay increase but makes major changes in
way program operates
June 9, 2008 – The office of Senate Finance
Committee Chairman Max Baucus (D-Mont.) on Friday issued a news release
saying the Chairman had “unveiled long-awaited legislation making
reforms to Medicare.” That is starting with an understatement. If
passed, this bill will change the face of Medicare. The headlines it
garnered focused on the move to give back to doctors the pay being cut
by Medicare but the meat is in the dozens of other provisions that make
significant changes to the program.
Called “The Medicare Improvements for Patients and
Providers Act of 2008,” the bill “contains significant measures to make
Medicare work better for the 44.1 million seniors enrolled, increases
the program’s payments to health providers, and saves billions of
dollars for taxpayers by reducing overpayments to some private Medicare
plans,” says the news release.
Baucus expects the bill to move straight to the
Senate floor for consideration this month, and intends to work together
with colleagues on both sides of the aisle for its bipartisan passage.
“As the Senate debates Medicare reform, we can’t
forget the seniors we serve. This bill does right by low-income and
rural seniors to make sure they get their health care, and really
improves the Medicare program for all who use it,” said Baucus.
“It gives doctors a decent, measured increase in
reimbursement that doesn’t explode costs or excessively raise premiums.
And it makes smart changes to stop overpayments to private plans that
are getting more than their share of taxpayer dollars.
“This bill will be debated and Senators will seek
to change it. I intend to work on the Senate floor with anyone who wants
to strengthen Medicare’s service to seniors, keep its costs in line, and
get a good bill passed into law.”
A section-by-section summary of the Act at
http://finance.senate.gov/sitepages/legislation.htm on the Finance
Committee website.
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Senate
Finance Committee Chair Baucus Introduces
Bill To Delay Reduction in Medicare
Physician Reimbursements
Senate Finance Committee Chair Max
Baucus (D-Mont.) on Friday introduced a bill
(S
3101) that would delay for 18 months a
10.6% reduction in Medicare physician
reimbursements scheduled to take effect on
July 1 and increase payments by 1.1%,
The Hill reports.
The legislation, which includes a number of
other provisions, would cost about $20
billion. The bill includes provisions to
promote electronic prescribing and expand
rural health care programs. In addition, the
legislation would require Medicare to
promptly pay pharmacies for medication
dispensed to beneficiaries and impose new
marketing restrictions for Medicare
Advantage plans (Young, The Hill,
6/6).
The bill would reduce
the copayments that beneficiaries pay for
mental health services from 50% to 20% (AP/Albany
Times Union, 6/6).
Baucus and Senate Majority Leader Harry Reid
(D-Nev.) agreed to bypass a committee mark
up of the legislation, and the bill likely
will reach the Senate floor by mid-week
(Armstrong, CQ Today, 6/6).
Offsets
The legislation includes reductions to MA
spending to offset the cost. The bill would
reduce indirect medical education payments
under MA and decrease spending for a
"stabilization fund" used to encourage
private health insurers to participate (The
Hill, 6/6).
In addition, the
legislation would limit a process called
"deeming," under which private health
insurers force health care providers to
participate in MA plans when they treat
beneficiaries enrolled in those plans.
The bill also would
reduce Medicare reimbursements to oxygen
providers, which many Democrats "believe ...
are overpaid," according to CQ Today
(CQ Today, 6/6).
Prospects
According to The Hill, although
"Congress is under considerable pressure to
prevent this reduction and preserve
beneficiaries' access to medical services,"
the bill faces "several political and
ideological barriers." For example, the Bush
administration has threatened to veto any
legislation that would reduce spending for
MA (The Hill, 6/6).
In addition, Senate Finance Committee
ranking member Chuck Grassley (R-Iowa) plans
to introduce a rival bill on Monday,
according to a spokesperson.
"While many of its
provisions are said to be almost identical
to those in the Baucus legislation, Grassley
says his bill will contain offsets --
focused on a narrow part of those
private-sector plans -- that will win the
approval of the White House," CQ Today
reports.
Grassley said that
the reconciliation process between the two
bills will result in the passage of more
limited legislation. "That also means that
the administration will likely get its way
in shrinking the Baucus offsets to
private-sector Medicare plans," according to
CQ Today (CQ Today,
6/6).
Private
Fee-For-Service Plan Enrollment
Private fee-for-service plans accounted for
more than half of the enrollment growth of
800,000 in MA in the first four months of
this year, according to an analysis released
on Thursday by the
Kaiser Family Foundation,
CQ HealthBeat reports.
According to CQ HealthBeat,
"continued enrollment growth would
complicate efforts to alter the plans to
make them less costly, as beneficiaries
exert political pressure to hold onto the
extra benefits they offer."
House Ways and Means Health Subcommittee
Chair Pete Stark (D-Calif.) said that
Congress should take action to revise the
plans this year. A Stark aide on Friday said
that the plans are "certainly threatening
the long-term health of the program." The
aide said that legislation to revise the
plans would not take effect until 2009, with
any changes unlikely to occur until 2010 (Reichard,
CQ HealthBeat, 6/6).
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An overview of provisions provided by the committee
follows.
A
Better Program for Every Beneficiary
●
Authorizes coverage of new preventive services recommended by the U.S.
Preventive Services Task force, and makes improvements to seniors’
“Welcome to Medicare” physical, including waiver of the deductible
● Cuts co-payments for mental health services to
match other outpatient medical care
●
Bans shady marketing practices by sellers of private Medicare plans, and
limits other sales and marketing tactics that may be deceptive or
confusing to seniors
●
Ends the sale of Medigap plans that are redundant as a result of the
drug benefit, and modernizes Medigap benefits to better meet seniors’
needs
Help
for Low-Income Seniors
●
Extends the Qualifying Individual (QI) program to pay outpatient
coverage (Part B) premiums for seniors with incomes slightly above the
poverty level
●
Raises the assets test for Medicare Savings Programs, increasing the
amount of savings that low-income seniors can have and still qualify –
from $4,000 to $7,790 for individuals, and from $6,000 to $12,440 for
couples
●
Enlists Social Security to help low-income seniors apply for the
Medicare Savings Program, so more who qualify get assistance
●
Eliminates penalties for late enrollment in the drug benefit by
low-income seniors
●
Ends a requirement that states collect back subsidies for Medicare cost
sharing from the estates of deceased Medicaid beneficiaries
●
Exempts the value of life insurance policies or assistance provided by
churches and family members from the asset test for the low-income
subsidy program in the Medicare drug benefit
●
Ensures beneficiaries’ right to a Federal court review if they are
denied low-income subsidy
●
Provides $25 million to State Health Insurance Assistance Programs (SHIPs)
and Area Agencies on Aging to help enroll low-income seniors in the
Medicare Savings Program and the low-income subsidy for the Medicare
drug benefit, and to help all seniors better navigate
Medicare Enhancements for Rural and Other Hospital Care
●
Extends the Medicare Rural Hospital Flexibility Program, which provides
grants that rural health care providers can use to improve the quality
of care facilities provide and to strengthen health care networks.
●
Provides new authority for States to improve access to mental health
care services for veterans in crisis and other residents of rural areas.
●
Requires the use of more recent data to better reimburse sole community
hospitals – the only hospital within 35 miles
●
Establishes a demonstration project to allow states to test new ways to
better coordinate hospital, nursing home, home health and other critical
health care services in rural areas.
●
Extends provisions providing certain hospitals additional payments to
cover their labor costs under Medicare
●
Revokes unique authority of the Joint Commission on the Accreditation of
Healthcare Organizations to deem hospitals in compliance with Medicare
Conditions of Participation
Proper
Pay for Medicare Providers
●
Blocks a cut in physician payments for Medicare services, and
increases payments by 1.1 percent in 2009.
●
Extends and increases the Physicians’ Quality Reporting Initiative (PQRI)
bonus for providers who measure and report on quality of care
●
Provides incentives to doctors who move to safer, more reliable
electronic prescribing methods, decreasing payments to doctors who fail
to do so by 2011
●
Increases payment for primary care services in shortage areas, corrects
a reduction applied to physician work, and adds new funding and
authority for the Medical Home Demonstration Project
●
Extends an increase in the geographic adjustment to payment for
physician work in rural areas
●
Extends rules allowing independent laboratories to bill Medicare
directly
●
Helps physicians called to active military duty receive Medicare
payments they’re owed
●
Implements an accreditation requirement for diagnostic imaging providers
and tests the use of appropriateness criteria for such services
●
Pays teaching anesthesiologists a full reimbursement for each patient
under their care, and comparable treatment of nurse anesthetists as well
Payment and Coverage Improvements to Medicare Outpatient Services
●
Allows exceptions when seniors need additional medical therapy beyond
current caps
●
Extends current payment rules covering brachytherapy and
radiopharmaceuticals
●
Allows speech pathologists to bill Medicare directly for services
●
Improves payments and coverage for patients with chronic obstructive
pulmonary disease (COPD) and other conditions, , including reforms to
oxygen payments
●
Revises payments for power wheelchairs, saving Medicare dollars while
making sure seniors get the equipment they need
●
Repeals a competitive bidding demonstration for clinical laboratory
tests and reduces scheduled increases in payments for these services
●
Improves access to ambulance services, particularly in rural areas
●
Ensures that critical access hospitals – small hospitals serving large
rural areas – are properly paid for clinical lab services provided to
Medicare beneficiaries
●
Expands the sites at which beneficiaries are eligible to receive
telehealth services in rural areas
●
Requires MedPAC to study and report on improving chronic care programs
●
Increases Medicare payments to community health centers
●
Requires the establishment of programs to fight chronic kidney disease
●
Increases payments for renal dialysis services, and bundles payments for
dialysis drugs, testing supplies, and other elements into a single, more
cost-effective payment for the treatment of End-Stage Renal Disease
(ESRD)
Smart
Reforms for Private Medicare Plans
● Eliminates the “double payment” made to Medicare
Advantage plans based on local costs for care at teaching hospitals – as
teaching hospitals already receive extra payments directly for their
sophisticated care
● Requires private fee-for-service plans in
Medicare Advantage to develop networks of providers to ensure care for
beneficiaries, and to measure and report on quality of care. Plans will
no longer be allowed to “deem” a hospital or provider as part of the
plan’s “network” without negotiating an actual contract for payment and
care.
● Extends specialized Medicare Advantage plans’
authority to target enrollment of special needs individuals, and revises
definitions, care management requirements, and quality reporting
standards
● Limits co-payments for beneficiaries eligible
for both Medicare and Medicaid when they are enrolled in specialized
Medicare Advantage plans
● Eliminates some funds from the Medicare
Advantage Stabilization Fund for regional preferred provider
organizations
● Extends authority to operate Section 1876 cost
contracts
● Directs MedPAC to study ways to collect quality
information and other comparison data for Medicare Advantage plans, and
to study alternative payment formulas for MA
Improvements to the Drug Benefit
● Requires prompt payment to pharmacies by
prescription drug plans for medicines dispensed through the drug benefit
● Requires regular updates on pricing standards
for drugs
● Reasonable requirements for submission of claims
by long-term care pharmacies
● Includes barbiturates and benzodiazepines for
drug benefit coverage
● Codifies current rules related to coverage of
“protected classes” of drugs
● Revises definition of “medically accepted
indication” for coverage of drug benefit medicines
Other provisions clarify the proper research uses
of Medicare drug benefit data and address issues of quality reporting
and health disparities. The bill also contains a number of improvements
and extensions related to the Medicaid program, most notably a delay in
the implementation of changes to “Average Manufacturer Price”
calculations that would slash payments to pharmacies for dispensing
generic drugs.
Transitional Medical Assistance (TMA) and
abstinence-only programs are extended through 2009.
Other extensions include the Temporary Assistance
for Needy Families supplemental grant program and Special Diabetes
Grants.
In addition to the staff legislative summary, more
detailed information on key aspects of the bill – help for rural seniors
and all beneficiaries, physician provisions, bundling of dialysis
payments for ESRD, Medicare Advantage reforms, and other measures – is
on the Finance Committee website at
http://finance.senate.gov/sitepages/baucus.htm.
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