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Kaiser Highlights Recent Developments In Medicare

Armen Hareyan's picture


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 overhaulof the hospital reimbursement system this year said it would cut annualpay increases by 1.2% in FY 2008 and 1.8% in fiscal year 2009 forreasons related to changes in the billing code system. Hospitals saidthe reduction would cost the industry $20 billion over five years. Thenew bill would reduce those rates to 0.6% in FY 2008 and 0.9% thefollowing year, a change that would cost hospitals an estimated $7billion. The Senate is expected to approve the legislation (Young, The Hill, 9/27).
  • Medicalsuppliers: CMS' new competitive bidding policy for medical equipmentcould 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 operatein 10 of the largest Metropolitan Statistical Areas and will apply to10 of the top durable medical equipment, prosthetics, orthotics andsupplies product categories (Kaiser Daily Health Policy Report,4/3). According to CMS, 15,973 suppliers will submit bids during thefirst round. Of those, an estimated 60%, or 9,584, will win contracts (USA Today, 9/27).
  • Medicare Advantage plans: Senate Finance Committeeranking 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 ascheduled cut in Medicare reimbursements to physicians, CongressDailyreports. Grassley's comments "echo private statements from othercongressional Republicans and lobbyists" who say MA payments thatexceed the level of payments to traditional Medicare "are not likely tosurvive the year intact," according to CongressDaily (Johnson, CongressDaily, 9/27).
  • Medicareprescription drug plans: CMS on Thursday announced that Medicarebeneficiaries in every state next year will be able to enroll in one ofat least five prescription drug plans with monthly premiums lower than$25, CQ HealthBeat reports. HHSSecretary Mike Leavitt said premiums for basic coverage will average$25 a month -- "nearly 40% lower than originally projected when thebenefit was established in 2003." According to CMS, 90% ofbeneficiaries will be able to choose a plan with premiums that costless than what they will pay this year. In addition, monthly premiumsfor drug coverage offered through MA plans on average will be $11 less,and more than 90% of beneficiaries will have access to managed careplan 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 permission from kaisernetwork.org. Youcan view the entire Kaiser DailyHealth Policy Report, search the archives, and sign up for email deliveryat kaisernetwork.org/email. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, afree service of The Henry J. Kaiser Family Foundation.