Category: Medicare

Former Bush Official: Medicare “Doc Fix” A Tribute To Big Spender Henry Waxman

Doug Badger, former Deputy Assistant to President Bush on Legislative Affairs, Staff Director of the Senate Policy Committee, and senior official at the U.S. Department of Health & Human Services has harsh words for the so-called Medicare “doc fix” that was rushed through the House of Representatives last month:

The $141 billion health care bill that cleared the House last month and that is expected to win Senate approval next week is a tribute from the GOP-controlled Congress to former Congressman Henry Waxman, a man who worked tirelessly – and with great success – to expand health care-related welfare spending.

The bill (H.R. 2) increases Medicare payments to physicians, largely by replacing one complicated and flawed formula with another. It directs the army of bureaucrats who populate CMS cube farms to soldier on with their futile, half-century-long quest to implement a workable system of administered pricing.

Meanwhile, at the National Journal, Dylan Scott asserts that winning the “doc fix” is “the end for Washington’s most frenzied lobbying extravaganza.” Oh, really? Are all those lobbyists demanding immediate Senate passage of this deficit-financed bill trying to put themselves out of work? I doubt it.

Administration Fears Rejection of Boehner-Pelosi-Obama Medicare “Doc Fix”

As we ease into Easter weekend, the Administration is losing confidence that the Senate will uncritically swallow the Boehner-Pelosi-Obama so-called Medicare “doc fix”.

According to The Hill, the Administration is pleading with the Senate to pass the Medicare Access and CHIP Reauthorization Act (MACRA) immediately when the Senate reconvenes on April 13. If not, the Administration will have to start processing doctors’ claims at a significantly lower rate of payment on April 15.

This pressure mirrors that of Obamacare supporters such as AARP and the American Hospital Association, which are lobbying hard towards the same goal: Recruiting Republican legislators onto Obamacare’s B-Team by getting them to vote for this perpetual extension of the current theory governing Medicare payments, which Obamacare made worse by centralizing decisions about “quality” and “value” in the federal government.

The Administration and Obamacare’s allies had hoped to get a sleepy Senate to rush this bill through on March 26, right after the Senators had pulled an all-nighter on the budget resolution. Fortunately, enough Senators had concerns about the bill’s budget busting-spending that they delayed a potentially catastrophic vote. It would have sent the president a bill that he is eager to sign, and lock in the Obamacare vision of Medicare for the foreseeable future.

Nevertheless, the Senate will have to act pretty quickly on April 13. There are much better policy options than those embraced in the current bill.

Critics Pile On Flawed Medicare Doc Fix

The Boehner-Pelosi so-called Medicare “doc fix” is taking on water, despite (or because of?) overwhelming bipartisan support in the House of Representatives.

Here’s David Hogberg at The Federalist:

……it replaces it with a new payments system that will cause the sickest Medicare patients to suffer the most. The bill’s new payment system is based on three Medicare programs: the “Physician Quality Reporting Program,” the “Value-Based Modifier,” and “Meaningful Use of Electronic Health Records,” all of which are supposed to improve the quality of treatment for Medicare beneficiaries. None of these programs have demonstrated any quality improvements on their own, yet the MACR now seeks to lump them all into one program called the “Merit-Based Incentive Payment System” (MIPS).

Honor Roll: 37 Voted Against the Budget Busting Medicare Doc Fix

“While I support an SGR replacement, I cannot vote in favor of a bill that costs more than $200 billion, while Congress only pays for $70 billion, leaving more than $130 billion to our children and grandchildren. We cannot continue to solve every problem by adding to the deficit,” Rep. Jim Bridenstine (R-Okla.) said in a statement.

The 37 Congressmen who voted against include high-ranking Republicans Darrell Issa and Jim Jordan.

Cristina Marcos of The Hill reports the entire list.

How Conservatives Rationalize the Budget Busting Medicare Doc Fix

Opposition to the outrageous so-called Medicare doc fix bill, which will increase the deficit by $141 billion, is growing. Michael Cannon of the Cato Institute explains how this will “bust the budget.” My Forbes editor, Avik Roy, pleads that the Senate stop this monstrosity (which passed the House by a huge majority). On the other hand, there are those unfortunate conservatives who endorsed the bill before the Congressional Budget Office (CBO) had announced what a budget buster it was. My friend Ryan Ellis of Americans for Tax Reform appreciates that the CBO score could give us a feeling of “whiplash”.

97 Percent of Medicare Doc Fix Deficit Funded

Today’s Health Alert warned against the so-called Medicare doc fix that is being jammed through the Congress this week. The Health Alert was written and published before the Congressional Budget Office issued its estimate of the bill’s effect on the deficit.

Here it is:

Over the 2015–2025 period, CBO estimates, enacting H.R. 2 would increase both direct spending (by about $145 billion) and revenues (by about $4 billion), resulting in a $141 billion increase in federal budget deficits (see table on page 2). Although the legislation would affect direct spending and revenues, it would waive the pay-as-you-go procedures that otherwise apply.

Less than three percent of this spending binge is paid for. Over 97 percent is deficit financed. This is how Republicans are showing how they can govern, especially on health reform?

Not in my worst nightmare did I think the bill would be this outrageous. As they say in America: “You gotta be kidding me!”

Any politician who votes for this will surely not be considered a credible voice in the debate over post-Obamacare health reform.

Here is the Heritage Foundation’s take. And AEI’s James Capretta and Scott Gottlieb.

Milliman Explains Why Medicare Advantage Has Not Collapsed

Milliman, the actuarial consulting firm, has published a new report on the impact of the government’s cuts to Medicare Advantage. The report was sponsored by the Better Medicare Alliance, which announced that “seniors now face soaring maximum annual out-of-pocket costs” due to the cuts.

And yet, the purported cuts have not really bitten health insurers. Medicare Advantage enrollment is at an all-time highNCPA has favored Medicare Advantage over the traditional Medicare Parts A and B, but we have noted that insurers seem to capture more of the value than beneficiaries do.

The Milliman report explains this quite well. Looking only at Medicare’s physician and hospital benefits (and ignoring the Part D drug benefit), Milliman reports that Medicare Advantage plans reduced the average beneficiary’s share of Medicare’s costs (coinsurance, deductibles, and Part B premium) by $67.65 in September 2012 (or $811.80 annually) and gave him $11.65 worth of non-Medicare benefits ($139.80 annually). The latter include enticements such as fitness-club memberships.

“Site-Neutral” Medicare Payments: A Good Idea from President Obama’s Budget

Imagine that there are two providers of the same service. Their quality and timeliness are comparable. However, one provider charges significantly more than the other. In a normally functioning market, you would expect that the more expensive provider would have to significantly change its cost structure to stay in business.

What if the more expensive provider argued that it had higher overhead, and therefore needed and deserved to be paid more? He would be laughed out of the marketplace. Yet, this is exactly what happens in Medicare. Because of different fee schedules, doctors in independent practice are paid less for the same procedure than hospital-based outpatient facilities. Unsurprisingly, this has resulted in hospitals buying up physician practices, in order to profit from this arbitrage:

For example, Medicare pays more than twice as much for a level II echocardiogram in an outpatient facility ($453) as it does in a freestanding physician office ($189). This payment difference creates a financial incentive for hospitals to purchase freestanding physicians’ offices and convert them to HOPDs without changing their location or patient mix. For example, from 2010 to 2012, echocardiograms provided in HOPDs increased 33 percent, while those in physician offices declined 10 percent. (Medicare Payment Advisory Commission, March 2014, p. 53)

Medicare Part D Responsible For 60 Percent of Medicare’s Spending Slowdown

When Medicare added Part D, the prescription-drug benefit, via the Medicare Modernization Act (2003), its framers decided that every beneficiary would receive the benefit from a private plan, not from the government directly.

The benefits of this design continue to show themselves. In Health Affairs, Loren Adler and Alex Rosenberg conclude that the Part D benefit is responsible for 60 percent of the reduction in the rate of Medicare spending since 2011.

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Medicare Advantage: Telemonitoring Cuts Hospital Readmissions 44 Percent, ROI $3.30 per Dollar

Geisinger Health Plan has conducted a study of elderly patients enrolled in Medicare Advantage who were treated for congestive health failure. It is reported by Mobihealthnews‘ Jonah Comstock:

A new study from Pennsylvania hospital system Geisinger Health Plan shows that remote monitoring of congestive heart failure patients can reduce readmissions by 38 to 44 percent and produce a return on investment of $3.30 on the dollar.