President Calls For Medicare Payment Rate Revisions

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President Obama reiterated his call to adjust Medicare reimbursement rates as a part of his broad push for health reform in a meeting with nine reporters, including writers from local newspapers, Wednesday. "While steering clear of details, Obama indicated that revised reimbursement rates helpful to areas [where reimbursement rates are low] should be part of a comprehensive healthcare reform package now in the works," McClatchy reports. "The reforms should also help steer more physicians to medically underserved regions, he said," achieve better quality, and lower government payments. The news service notes that the meeting was "part of [Obama's] effort to rally political support for a healthcare rewrite. The package is still a work in progress, as key congressional committees already have missed their self-imposed legislative deadlines" (Doyle, 7/1).

Obama's budget director, Peter Orszag, says these and other reforms proposed by the administration could cut more than $200 billion in Medicare costs over 10 years, MSNBC reports. They would also seek to make Medicare sustainable in the long term. The programs is expected to nearly double in size by 2030, and its hospital insurance program is expected to run out of money far sooner (Curry, 7/1).

Meanwhile, "the agency that runs Medicare [on Wednesday] suggested making an obscure accounting change that could make it easier for Congress to change how Medicare pays doctors," the Wall Street Journal's Health Blog reports. Doctors are faced with a 21.5 percent Medicare payment cut beginning Jan. 1. Under the new plan, Medicare would create a new category of spending for drugs administered to patients by their doctors, shifting the fastest-growing portion - $87.5 billion over ten years - of physicians' services and narrowing next year's cut.

The change may not have any short-term impact on Medicare spending of physician reimbursement rates, but may ease the way for Congress to adopt new ways to pay doctors, the Journal reports (Goldstein, 7/1).

CNN Money/ Dow Jones reports: "The federal government on Wednesday announced that it intends to remove the cost of prescription drugs from its formula for determining payments from the Medicare program to physicians. The move is expected to help keep Medicare payment rates for physicians from dropping in future years. The White House budget for 2010 had suggested that the cost of physician-administered prescription drugs could be taken out of the formula as a way to stabilize payment rates, and the Centers for Medicare and Medicaid Services made the change official Wednesday" (Yoest, 7/1).

Meanwhile, CBS reports on a Medicare payment study: "For the last four years, doctors at Dartmouth-Hitchcock Health in New Hampshire have been part of a Medicare experiment that pays for quality. Doctors get paid for seeing patients, and get a bonus for patients that get better. The clinic gets extra money for high scores in 36 areas, like controlling the blood sugar of diabetics or keeping heart patients on cholesterol drugs. To keep track, nurses regularly call every patient - as often as it takes - to keep them healthy and out of the hospital. Special attention goes to patients who've been in hospital - to keep them from having to go back... All that contact earned Dartmouth a $6.7 million bonus payment - 80 percent of the $8.4 million that Medicare actually saved by avoiding expensive procedures. Around the country, 10 physician groups are conducting these pay for performance experiments, but the truth is they don't all save money every year. All 10 of the groups improved the health of their patients, but found that saving money on the elderly can take years.... So when the president calls for payment reform, almost every health care expert says he's right. But the amount he can save, no one knows that for certain" (Andrews, 7/1)

This information was reprinted from kaiserhealthnews.org with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at kaiserhealthnews.org.

© Henry J. Kaiser Family Foundation. All rights reserved.

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