Congress Braves First Steps in Medicare Reform

Seniors beware: Congress is considering changes to what Medicare will pay for, and what’s coming out of your pocket.

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National Journal
Clara Ritger
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Clara Ritger
Jan. 20, 2014, 3:36 a.m.

Con­gress is get­ting ser­i­ous about changes to Medi­care, even if that means cut­ting cov­er­age to ser­vices that seni­or cit­izens have long en­joyed.

At is­sue are what’s known as Medi­care “ex­tenders,” tacked-on money that Con­gress has to ap­prove an­nu­ally to fund the pro­gram’s cov­er­age for be­ne­fi­ciar­ies with chron­ic and de­bil­it­at­ing con­di­tions. In past years, Con­gress has passed a blanket ex­ten­sion of the pay­ments, which in­clude such things as fund­ing for rur­al and low-volume hos­pit­als, am­bu­lance rides, spe­cial­ized care for needy pa­tients, and out­pa­tient ther­apy.

But this time around — after tril­lions in debt and hav­ing vowed to root out waste — Con­gress is at­tempt­ing to be choo­si­er, look­ing to move cer­tain ex­penses off of the fed­er­al books. Cur­rently, le­gis­lat­ors are mulling two dif­fer­ent plans: one from the Sen­ate Fin­ance Com­mit­tee and the oth­er from the Medi­care Pay­ment Ad­vis­ory Com­mis­sion (Med­PAC), the in­de­pend­ent con­gres­sion­al ad­vis­ory board es­tab­lished in 1997 to ad­vise Con­gress on Medi­care policy.

And as they make their de­cisions, law­makers will be de­cid­ing what ser­vices seni­ors’ still get their gov­ern­ment plan to cov­er, and which ones they will have to find fund­ing for else­where. Here are a few ser­vices on Medi­care’s chop­ping block.

Rur­al Hos­pit­als

Un­der the cur­rent sys­tem: Con­gress votes each year to grant ad­di­tion­al pay­ments to hos­pit­als in rur­al areas that see a low num­ber of pa­tients, in or­der to guar­an­tee ac­cess for be­ne­fi­ciar­ies in the event that a hos­pit­al can’t af­ford to stay in busi­ness.

Un­der Sen­ate Fin­ance: The cur­rent situ­ation would re­main in place.

Un­der Med­PAC: Med­PAC does not make a spe­cif­ic re­com­mend­a­tion, but it notes that tax­pay­ers may be fund­ing more hos­pit­als than they need to, be­cause the pay­ments can go to sup­port two com­pet­ing low-volume hos­pit­als in rur­al areas, where pa­tients would only need one to guar­an­tee ac­cess to care.

Am­bu­lances

Un­der the cur­rent sys­tem: Each year Con­gress votes to pay ex­tra for am­bu­lances, trans­port­a­tion in rur­al areas, and care flights.

Un­der Sen­ate Fin­ance: Ground and su­per rur­al trans­port get ex­tra pay­ments un­til Jan. 1, 2019, when the Health and Hu­man Ser­vices De­part­ment will de­cide wheth­er they’re ne­ces­sary.

Un­der Med­PAC: Med­PAC re­com­mends let­ting the add-on pay­ments ex­pire, which they would do auto­mat­ic­ally at the end of March un­less Con­gress acts. Med­PAC says the pay­ments are un­ne­ces­sary. In their data ana­lys­is from 2007 to 2011, Med­PAC found a rap­id in­crease in Medi­care be­ne­fi­ciar­ies’ use of am­bu­lat­ory ser­vices for none­mer­gency pur­poses — for ex­ample, to dia­lys­is ap­point­ments — as well as growth in none­mer­gency am­bu­lat­ory ser­vices provided by a small num­ber of for-profit sup­pli­ers and private-equity firms en­ter­ing the mar­ket, sug­gest­ing “that profit op­por­tun­it­ies in the in­dustry have been avail­able,” ac­cord­ing to Med­PAC Chair­man Glenn Hack­barth’s writ­ten testi­mony to the House En­ergy and Com­merce Sub­com­mit­tee on Health.

Spe­cial Needs Plans

Un­der the cur­rent sys­tem: Medi­care of­fers spe­cial­ized cov­er­age to be­ne­fi­ciar­ies liv­ing in nurs­ing homes, be­ne­fi­ciar­ies with chron­ic con­di­tions, such as end stage ren­al dis­ease or HIV/AIDS, and be­ne­fi­ciar­ies who are also eli­gible for Medi­caid. The cov­er­age helps co­ordin­ate care for be­ne­fi­ciar­ies who need a wide vari­ety of ser­vices.

Un­der Sen­ate Fin­ance: Sen­ate Fin­ance is pro­pos­ing phas­ing out all of these types of plans, ex­cept the ones for be­ne­fi­ciar­ies liv­ing in nurs­ing homes.

Un­der Med­PAC: Med­PAC says some of those plans — such as the ones for HIV/AIDS pa­tients — pro­duce pos­it­ive health out­comes and should re­main in ef­fect. Without the SN­Ps, be­ne­fi­ciar­ies would be rolled in­to Medi­care Ad­vant­age plans.

Out­pa­tient Ther­apy

Un­der the cur­rent sys­tem: Medi­care pay­ments for out­pa­tient ther­apy is capped, with those who qual­i­fy for the ex­cep­tions pro­cess sub­ject to a claims re­view be­fore Medi­care will re­im­burse. The pro­cess has caused some pro­viders — in­clud­ing long term care fa­cil­it­ies and nurs­ing homes — to con­tin­ue provid­ing treat­ment, only to find out that Medi­care will not be pay­ing them back.

Un­der Sen­ate Fin­ance: Sen­ate Fin­ance wants to do away with the caps al­to­geth­er, al­low­ing HHS to de­term­ine which spe­cif­ic pro­ced­ures or con­di­tions will re­quire auto­mat­ic claims re­views. Pro­viders would have to ob­tain pr­eau­thor­iz­a­tion, mean­ing they could not provide treat­ment un­til the claim is re­viewed.

Un­der Med­PAC: Med­PAC wants to keep the caps and re­duce them, to lim­it un­ne­ces­sary spend­ing by some be­ne­fi­ciar­ies and in­crease over­sight on oth­ers who seek a lot of ther­apy.

And All of It While Ra­cing the Clock

As Con­gress mulls changes, it will have to do it on a dead­line — pay­ments for most of the pro­grams are set to ex­pire March 31.

But how quickly Con­gress will come to an agree­ment be­fore that dead­line is un­clear.

Montana Demo­crat Max Baucus, chair­man of the Sen­ate Fin­ance Com­mit­tee, has said he’d like to see it done be­fore he as­sumes his new role as am­bas­sad­or to China, ac­cord­ing to Ju­li­us Hob­son, a lob­by­ist at Polsinelli Shughart who rep­res­ents phys­i­cian groups and long-term-care fa­cil­it­ies and a former dir­ect­or of con­gres­sion­al af­fairs at the Amer­ic­an Med­ic­al As­so­ci­ation. Sen­ate Ma­jor­ity Lead­er Harry Re­id, D-Nev., said at a fun­drais­ing event that his goal is to have Baucus’s con­firm­a­tion com­pleted by mid-Feb­ru­ary, Hob­son said, and get­ting the whole “doc-fix” pack­age ready by mid-Feb­ru­ary “is a tall, tall or­der.”

While the Sen­ate Fin­ance pro­pos­al is ready for floor ac­tion, both the House En­ergy and Com­merce Com­mit­tee and the Ways and Means Com­mit­tee are work­ing out the ex­tenders policies and the pay-fors on their re­spect­ive ver­sions of the per­man­ent “doc fix.” A spokes­man for the Sen­ate Fin­ance Com­mit­tee said the three are in on­go­ing ne­go­ti­ations about the pro­pos­als, and a spokes­wo­man for the Ways and Means Com­mit­tee said they are re­view­ing the re­com­mend­a­tions from Sen­ate Fin­ance, Med­PAC, and key stake­hold­ers — such as long-term-care fa­cil­it­ies and nurs­ing homes — in their work.

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