Group Proposes Medicare Changes, While Providers Have Their Own Suggestions for Congress

In the wake of the 2012 election, which has left the balance of power in Washington, D.C. unchanged, certain realities are becoming clearer. For one, implementation of the health reform law enacted over two years ago will continue, with few legislative options open for those who oppose the law. Perhaps more significantly, if Congress does not act before January 1, 2013, automatic 2 percent reductions in Medicare payments to most providers, and an additional 27 percent cut in Medicare payments to physicians will go into effect.

The automatic 2 percent reduction is the result of the  Budget Control Act of 2011 (P.L. 112-25); the cut in physician payments is a continuation of Congress’ yearly attempts to deal with a physician payment (for a recent story on this, see AARP Exhorts Congress to Eliminate SGR).

In the meantime, providers that derive a significant amount of revenue from Medicare are weighing in with proposals for to protect or expand their Medicare reimbursement, including hospitals, physicians, and home health agencies.

A nonpartisan think tank, the Center for American Progress (CAP), has come up with its own plan to reduce Medicare spending by $385 billion without shifting that spending to individuals, employers, or the states. The plan avoids discussion of other Medicare reform proposals, including replacing the existing Medicare program with a voucher program for anyone currently 55 years or younger; raising the eligibility age to 67; increasing cost sharing by individuals; and cutting Medicaid payments for long-term care.

Among CAP’s suggestions:

  •  expand competitive bidding for durable medical equipment, prosthetics, orthotics, and supplies nationwide by July 2014;
  • use competitive bidding for Medicare Advantage and Medicaid managed care plans;
  • require private health plans to make prices transparent;
  • expand the concept of “accountable care organizations” to “accountable care states,” which would establish a global target for all health care spending by both public and private payers;
  • better coordinate care for individuals eligible for both Medicare and Medicaid;
  • repeal the sustainable growth rate mechanism used to set Medicare physician payments;
  • reform the system of funding graduate medical education, in part by requiring private insurers to contribute more to the system;
  • limiting cost sharing based on income; and
  • cutting administrative costs and improper payments.