MEDICARE WATCH(from another list)

[Guest guest]

(this is an older one from another list as the other one I sent today. I'm

going to sign up for these newsletters so I can try to send them as often as

I can. Nae)

Welcome to MEDICARE WATCH, a biweekly electronic newsletter of the Medicare

Rights Center

Vol. 12 , No. 14: July 15, 2009

Contents:

*1. FAST FACT ***

*2. WHITE HOUSE ANNOUNCES DEAL WITH HOSPITALS TO CUT MEDICARE AND MEDICAID

PAYMENTS*

*3. HOUSE DEMOCRATS SAY CBO PROJECTS $500 BILLION IN SAVINGS FROM MEDICARE

REFORMS*

*4. REPORT ANALYZES IMPACT OF PLANS TO SCALE BACK SENATE HEALTH BILL ***

*5. CASE FLASH: OUT-OF-NETWORK URGENT CARE SHOULD BE COVERED BY HMO ***

*

------------------------------

*

*1. FAST FACT*

Proposed health reform legislation from the House of Representatives will

completely eliminate the Part D doughnut hole in 14 years, but would provide

more immediate assistance to people using high-cost specialty drugs by

progressively narrowing the coverage gap. (Avalere Health, *Avalere Analysis

of Proposed Elimination of Coverage

Gap<http://www.kintera.org/TR.asp?a=8dJGKVNqEcKOK2L & s=afIPLVPrE8LKJZNDJsG & m=dpKG\

IUMuFaIVG & af=y>

*, June 2009)

*2. WHITE HOUSE ANNOUNCES DEAL WITH HOSPITALS TO CUT MEDICARE AND MEDICAID

PAYMENTS*

The White House announced an agreement with three associations representing

the hospital industry to cut Medicare and Medicaid payments by $155 billion

over ten years to help finance efforts to extend health coverage to all

Americans. The payment reduction agreement would take effect only if it is

part of successful health reform legislation.

Hospital representatives from the three groups, the Federation of American

Hospitals, the Catholic Health Association and the American Hospital

Association, said that about $103 billion of the projected $155 billion in

savings would be produced from reductions in annual Medicare payment

increases to hospitals. About $2 billion in savings would come from trimming

the money hospitals receive for preventing patients from being readmitted

for additional care.

The remaining $50 billion would be generated from lowering federal Medicare

and Medicaid payments made to “disproportionate share hospitals” (DSH) that

provide care to a large number of people who are uninsured and/or

individuals with limited incomes. These payment cuts would be tied to

benchmarks for extending coverage to uninsured patients now treated by these

hospitals. After ten years, approximately 60 percent of total DSH payments

would be preserved.

Hospitals also stand to benefit from the deal brokered between the White

House and Senator Max Baucus, Democrat of Montana and chairman of the Senate

Finance Committee. If the Finance Committee’s proposal includes a public

health insurance option, hospitals may be reimbursed at rates higher than

what Medicare and Medicaid pay. According to the three hospital

associations, the complete details of the agreement will be included in the

mark-up legislation to be released by Senate Finance Committee Chairman Max

Baucus.

In addition to delivery system reform, the hospital industry acknowledged

that substantial health care savings can be achieved by improving

efficiencies and realigning incentives to emphasize quality of care instead

of quantity of procedures. In particular, hospitals are supporting

initiatives such as value-based purchasing, where the goal is to reduce

inappropriate care and identify and reward the best-performing providers;

testing ways to better integrate care, including bundled payments in which

providers are paid for improving their patients' health rather than for

separate procedures; and taking steps to reduce unnecessary hospital

readmissions in order to produce savings that will be used to finance health

care reform.

*3. HOUSE DEMOCRATS SAY CBO PROJECTS $500 BILLION IN SAVINGS FROM MEDICARE

REFORMS*

Democrats in the House committees on Ways and Means, Energy and Commerce,

and Education and Labor said last week that a recent estimate from the

Congressional Budget Office (CBO) shows their draft bill would yield more

than $500 billion in gross savings to Medicare over ten years. The draft

bill would also improve access to health care for people with Medicare who

have low incomes and would close the Medicare prescription drug coverage

gap.

Other provisions in the bill that would require additional spending would

reduce the total savings of the House Tri-Committee health reform discussion

draft to $152 billion. CBO also cautions that its estimates are limited to

costs and savings associated with Medicare included in the draft bill.

According to CBO’s report, savings of more than $110 billion over ten years

would be generated in Medicare Part A, which covers inpatient hospital

services, by reducing annual payment increases to hospitals and skilled

nursing and inpatient rehabilitation facilities. About $16 billion in

additional savings would come from reducing preventable hospital

readmissions.

CBO also projects savings of $156 billion over ten years attributed to

reductions in payments to Medicare private health plans, including phase-in

of new payments pegged to costs under Original Medicare. In addition,

Medicare will achieve $63 billion of savings over ten years by requiring

drug manufactures to provide Medicare with discounted prices for drugs

purchased by low-income individuals eligible for Extra Help.

The House Tri-Committee health reform discussion draft would also improve

and simplify financial assistance for people with Medicare who have low

incomes. The principal provision would raise the asset limit for low-income

assistance programs, specifically Extra Help, which helps pay prescription

drug costs, and Medicare Savings Programs, which help pay premiums and

coinsurance for medical services. These reforms would cost $39.6 billion

over ten years. In addition, the draft bill eliminates cost-sharing for

Medicare-covered preventive services at a cost of $2.8 billion over ten

years. The highest cost provision in the bill—$228 billion over ten

years—eliminates pending payment cuts to doctors under the current payment

formula.

*4. REPORT ANALYZES IMPACT OF PLANS TO SCALE BACK SENATE HEALTH BILL *

The Senate Finance Committee’s efforts to reduce the cost of its health

reform bill to approximately $1 trillion over ten years could put health

coverage out of reach for moderate-income Americans, particularly those

approaching retirement, according to a report by the Center on Budget and

Policy Priorities.

Among the provisions the Senate Finance Committee is weighing are changes in

the subsidies designed to enable low- and moderate-income families and

individuals to afford health insurance. Under previous drafts of the Finance

Committee bill, families and individuals with incomes up to 400 percent of

the federal poverty level could qualify for sliding-scale subsidies to help

pay for health coverage. The most recent draft lowers the income eligibility

limit for the subsidies to 300 percent of the poverty line. In 2009, the

federal poverty level is $10,830 per year for an individual and $22,050 for

a family of four.

The Center on Budget and Policy Priorities found that such a change would

make it more difficult for moderate-income households, mainly those between

300 percent and 400 percent of the poverty level, to afford insurance,

resulting in a greater number of people in that income range remaining

uninsured.

According to the Center’s paper, the Senate Finance Committee is also

considering a proposal that would allow health insurance companies to charge

older adults premiums that are *five times* higher than the premiums for

younger adults. This difference is much greater than other health reform

proposals, such as the legislation released by three House committees and

the Senate Committee on Health, Education, Labor and Pensions (HELP), which

allows rates to vary by no more than a 2 to 1 ratio. The Center reports that

if health reform permits insurers to charge older adults much larger

premiums than younger adults, especially coupled with an eligibility limit

for subsidies set at 300 percent of the poverty line, many near-elderly

adults with modest incomes would have difficulty affording coverage and

would likely remain uninsured.

*5. CASE FLASH: OUT-OF-NETWORK URGENT CARE SHOULD BE COVERED BY HMO *

Mr. M. had a Medicare private health plan, an HMO. In November 2008, he went

to the dentist to be fitted for dentures. The procedure resulted in swelling

and an ulcer formed on his palate, and a biopsy was required. Because Mr. M

could not find an oral surgeon in his HMO to perform the biopsy, his dentist

referred him to an oral surgeon who was outside of his network. The surgeon

billed the plan, but the request was denied because the oral surgeon was out

of network. After the surgeon was denied payment, he asked Mr. M to pay the

outstanding balance of $300. Mr. M paid, even though he didn’t think he

should have to.

Mr. M called the Medicare Rights Center for help. A hotline counselor

confirmed Mr. M’s suspicions: he was not responsible for the full cost of

the treatment because his HMO is required to cover the cost of “urgently

needed services,” even if they are received from out-of-network doctors.

Plans consider services urgently needed—and thus will cover them—if they are

required as a result of unforeseen injury when the patient is outside of the

service area or the provider network (or the provider network is unavailable

or inaccessible, as in Mr. M’s case), and it is unreasonable to require the

patient to get the services from a network provider. The hotline counselor

walked Mr. M through the steps of appealing, starting with reading the

appeals directions that were included on Mr. M’s Explanation of Benefits,

the document Mr. M received from his private plan telling him that it would

not cover the services.

In March 2009, Mr. M won his appeal. Because his service was urgent, Mr. M

was responsible only for paying his private plan’s usual $10.00 copayment.

His HMO provider paid the physician the difference (up to the plan’s

approved amount for the service), and Mr. M is awaiting reimbursement of

$290 from the provider.

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*Medicare Watch* is the Medicare Rights Center’s fortnightly newsletter,

established to strengthen communication with national and community-based

organizations and professional agencies about current Medicare policy and

consumer issues. Each edition contains news of recent policy developments

affecting Medicare and health care generally and a case story from our

hotline that illustrates steps professionals can take to get older adults

and people with disabilities the health care they need.

The Medicare Rights Center is a national, nonprofit consumer service

organization that works to ensure access to affordable health care for older

adults and people with disabilities through counseling and advocacy,

educational programs and public policy initiatives.

© 2008 by Medicare Rights Center. All rights reserved.

*For reprint rights,* please contact Sheena Bhuva

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