Kaiser Daily Health Policy Report Highlights Recent Developments In Medicare

Main Category: Medicare / Medicaid / SCHIP
Article Date: 01 Oct 2007 - 9:00 PDT

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The following summarizes recent coverage related to Medicare.

• Hospital reimbursements: The House on Wednesday passed a bill that would mitigate the financial effect that a new CMS rule would have on hospital reimbursement rates for certain services, The Hill reports. CMS in its overhaul of the hospital reimbursement system this year said it would cut annual pay increases by 1.2% in FY 2008 and 1.8% in fiscal year 2009 for reasons related to changes in the billing code system. Hospitals said the reduction would cost the industry $20 billion over five years. The new bill would reduce those rates to 0.6% in FY 2008 and 0.9% the following year, a change that would cost hospitals an estimated $7 billion. The Senate is expected to approve the legislation (Young, The Hill, 9/27).
  
  
• Medical suppliers: CMS' new competitive bidding policy for medical equipment could cause "thousands of small companies to close, merge or sell" because they are unable to compete with larger firms, USA Today reports (Appleby, USA Today, 9/27). CMS said that the 2008 competitive bidding program will operate in 10 of the largest Metropolitan Statistical Areas and will apply to 10 of the top durable medical equipment, prosthetics, orthotics and supplies product categories (Kaiser Daily Health Policy Report, 4/3). According to CMS, 15,973 suppliers will submit bids during the first round. Of those, an estimated 60%, or 9,584, will win contracts (USA Today, 9/27).
  
  
• Medicare Advantage plans: Senate Finance Committee ranking member Chuck Grassley (R-Iowa) on Wednesday said he is "open" to some cuts in payments to private MA plans to fund a reversal of a scheduled cut in Medicare reimbursements to physicians, CongressDaily reports. Grassley's comments "echo private statements from other congressional Republicans and lobbyists" who say MA payments that exceed the level of payments to traditional Medicare "are not likely to survive the year intact," according to CongressDaily (Johnson, CongressDaily, 9/27).
  
  
• Medicare prescription drug plans: CMS on Thursday announced that Medicare beneficiaries in every state next year will be able to enroll in one of at least five prescription drug plans with monthly premiums lower than $25, CQ HealthBeat reports. HHS Secretary Mike Leavitt said premiums for basic coverage will average $25 a month -- "nearly 40% lower than originally projected when the benefit was established in 2003." According to CMS, 90% of beneficiaries will be able to choose a plan with premiums that cost less than what they will pay this year. In addition, monthly premiums for drug coverage offered through MA plans on average will be $11 less, and more than 90% of beneficiaries will have access to managed care plan drug coverage that includes no premiums, CMS said (Reichard, CQ HealthBeat, 9/27). No national plan will cover brand-name drugs during the so-called "doughnut-hole" coverage gap, according to Avalere Health (USA Today, 9/28). The open enrollment period for Medicare drug plans starts Nov. 15 (CQ HealthBeat, 9/27).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation© 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.