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Medicare at a glance
Medicare is the federal health care system that covers about 36 million people age 65 and older, plus 7 million disabled. It has four parts:
Financed by a 2.9 percent payroll tax divided equally between employees and employers.
Financed by beneficiary premiums and federal general revenue. Current monthly premiums are $93.50. Starting this year, individuals whose taxable income is more than $80,000 will pay a higher premium.
Financed by Medicare and beneficiary premiums, which vary among plans.
The plans are private and financed by Medicare and beneficiary premiums, which vary among plans.
-- Larry Lipman
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Home > Medicare Monitor > Archives > 2008 > June
June 2008
Reid: Senate will try again next month
Reid said the Senate will try again when it returns from its July 4th recess.
“Senate Republicans will be given another opportunity to reconsider their unfortunate decision to hurt patients and doctors,” Reid said.
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Senate slammed on Medicare vote
Reaction was sharp and bitter after the Senate fell one vote short late Thursday night of passing a bill that would have averted a 10.6 percent cut in Medicare payments to doctors slated to take effect Tuesday.
The final vote on a procedural move to proceed was 58-40 after Senate Majority Leader Harry Reid, D-Nev., switched his vote to preserve his parliamentary options. Sixty votes were needed.
Democrats blamed Republicans and President Bush, who had threatened to veto the bill. Republicans blamed Democrats. Doctors and advocates for the elderly tended to place most of the blame on the Republicans.
Reid said this about the Republicans after the vote: “Our seniors and the health-care providers who care for them have only Senate Republicans to blame when Medicare payments are cut and other key protections expire. The House overwhelmingly passed a good bill in bipartisan fashion that ensures Medicare works better for every American senior and saves taxpayers billions of dollars - but Senate Republicans insist on standing with President Bush to protect insurance companies at the expense of patients and providers. This is nothing short of putting politics above the seniors and people with disabilities who depend on Medicare.”
Sen. Chuck Grassley, the ranking Republican on the Senate Finance Committee on Finance, said Democrats were to blame.
“The Senate leader’s take-it-or-leave-it approach and on-the-floor election-year calculations hurt doctors and seniors,” Grassley said. “It’s past time for the Senate to act responsibly and work out a bipartisan bill to avert an unfair cut in the reimbursement rate for doctors who treat Medicare patients.”
Here’s the irony: both Republicans and Democrats wanted to avert the paycut, but despite having six months to work something out they couldn’t reach an agreement on how to pay for it. Democrats wanted to take much of the money out of payments to private managed care plans; Republicans didn’t.
Dr. Nancy H. Nielsen, president of the American Medical Association , said doctors “are outraged that a group of Republican senators followed the direction of the Bush administration and voted to protect health insurance companies at the expense of America’s seniors, disabled and military families.
“These senators leave for their 4th of July picnics knowing that the most vulnerable Americans are at risk because of the Senate’s inability to act to stop drastic payment cuts for health care services that are needed by our Medicare and TRICARE patients.”
Judith Stein, executive director of the Center for Medicare Advocacy, said: “We are saddened that the misplaced priorities of some senators prevented a bill with overwhelming bi-partisan support in the House from coming to the floor of the Senate.
“As we approach Independence Day and celebrate American values, we need to remember our commitment to those who came before us and question the priorities of those who put the interests of insurance companies over the interests of Medicare beneficiaries. Once again we call on senators to pass effective Medicare legislation. It’s time to support people with Medicare and physicians over private plan profits.”
Robert M. Hayes, president of the Medicare Rights Center, said: “The 39 Republican senators who lined up behind President Bush to oppose this sensible and humane bill are agents of harm to older Americans. People with Medicare, as well as the doctors who care for them, should know that and tell them that as they go home for their July 4th recess. The vote shows a callous disregard for the older adults and people with disabilities in their states and a craven submission to the insurance industry.”
Barbara B. Kennelly, president and CEO of the National Committee to Preserve Social Security and Medicare said: “Once again we’ve seen the profits of the insurance industry take precedence over a call for help from America’s seniors and their doctors.
“Instead of approving important beneficiary improvements for the more than 44 million seniors and people with disabilities served by Medicare, a minority in the Senate once again blocked action on legislation that would have begun to reduce the overpayment of billions of tax payer dollars to Medicare Advantage insurers.”
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AMA ‘pleased’ with Medicare bill
“Action now moves to the U.S. Senate. We urge the Senate to act prior to the July 4th recess to pass legislation to stop the cuts and allow Medicare to continue to keep its promise to our nation’s seniors. Medicare cuts will hurt seniors as physicians are forced to make practice changes to keep their medical practice doors open. The future for seniors’ access to health care is dire - unless the Senate acts.”
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AHIP Reacts to House Medicare bill passage.
“Congress today rushed through legislation that would require Medicare Advantage beneficiaries to pay for the increase in physician payments without considering the impact these cuts would have on vulnerable seniors. As seniors learn the details of this hastily passed legislation, they will be shocked to learn they could face fewer choices, reduced benefits, and higher out-of-pocket costs if these cuts become law,” Ignagni said in a statement.
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House passes Medicare bill
With less than a week before a deep cut in Medicare payments to doctors is scheduled to take effect, the House passed a bill Tuesday that would avert those cuts while trimming payments to private managed care plans.
The 355-59 vote came despite Republican leaders complaints that the Democrats had not given lawmakers enough time to review the legislation and had refused to allow the bill to be amended.
But Democrats argued the hasty passage was necessary because doctors have warned they will stop taking new Medicare patients if their payments are reduced.
Unless Congress acts, a 10.6 percent cut in Medicare payments to doctors is scheduled to take effect July 1. Under the bill, the reduction would be averted and doctors would receive a 1.1 percent increase starting next January.
A similar bill failed to win Senate consideration on a procedural vote last week.
The White House issued a statement Tuesday warning that the president’s top advisors would recommend a veto if the House bill passed.
Meanwhile, key senators who have been working on a similar bill appeared close to an agreement that would avert the physician pay cut without significantly trimming payments to private Medicare Advantage plans.
Despite reports that the Senate was near a bipartisan agreement, Rep. Pete Stark, D-Calif., warned members not to wait for the Senate to act.
“This may be the last chance,” Stark said.
But Rep. James McCrery, R-La., said the Seante would reject the House bill and even if it passed it would be vetoed by the president.
In addition to averting the physician pay cut, the bill would delay for 18 months a controversial plan to limit the sale and rental of medical equipment starting July 1 in 10 metropolitan areas including an area covered by Palm Beach, Broward and Dade counties.
Other provisions of the bill would provide greater benefits to the mentally ill, increase subsidies for low-income beneficiaries to purchase prescription drugs and require quicker Medicare payments to pharmacies.
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Poll: beneficiaries oppose cutting Medicare Advantage
A poll paid for by an association of private health plans — including those offering Medicare Advantage plans — found that most seniors oppose cutting the Medicare Advantage program as the way to avoid cutting payments to doctors.
While the industry-sponsored poll found widespread support for the Medicare Advantage program among those enrolled in such private plans, it also found substantial support for it among those enrolled in traditional fee-for-service Medicare.
The poll was conducted by Ayres, McHenry & Associates and the Feldman Group and paid for by America’s Health Insurance Plans.
According to the poll, beneficiaries in traditional Medicare would prefer cutting payments to doctors by a 3-to-1 ratio instead of cutting Medicare Advantage. Those enrolled in Medicare Advantage plans favored that option by a 6-to-1 ratio.
The beneficiaries also indicated they thought cuts to the Medicare Advantage program would have a negative impact on seniors in such health plans.
Only half of the beneficiaries — regardless of whether they were in traditional or Medicare Advantage plans — oppose the scheduled 10.6 percent physician pay cut slated to begin July 1.
But by a 5-to-1 ratio among fee-for-service beneficiaries and 13-to-1 ratio among Medicare Advantage beneficiaries, they would prefer cutting other programs than cutting Medicare Advantage or raising taxes.
Hmmm. Let’s see. Cut doctors’ payment rates or raise taxes …
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Nursing home star rating system unveiled
Just like deciding between a one-star and five-star hotel or restaurant, the Centers for Medicare and Medicaid Services plan to launch a star rating system for nursing homes. The idea is to make it easier for prospective residents and their families to select a quality home.
The rating system will be posted on Medicare’s Web site — www.medicare.gov — by the end of the year.
“More than 3 million Americans rely on services provided by a nursing home at some point during the year. The new ‘five-star’ rating system will provide a composite view of the quality and safety information currently on Nursing Home Compare to help beneficiaries, their families, and caregivers compare nursing homes more easily,” said Kerry Weems, CMS’ acting administrator.
The proposal drew jeers and cheers from the nursing home industry and patient advocates.
Bruce Yarwood, president and CEO of the American Health Care Association praised the idea of the rating system but said he was concerned about using survey data to assess quality in individual facilities.
“Every one of our nation’s nursing home residents deserves the highest quality nursing home care, and although we applaud the longstanding work of CMS, we do not believe that an index which relies upon a broken survey system is an accurate way to measure quality, Yarwood said. “Quality improvement is a dynamic ongoing process - and its quantification must reflect the many variants that go into the delivery of care.”
Yarwood also urged the agency to, “incorporate consumer and staff satisfaction, which are two critical components of quality care,” in its rating system.
Larry Minnix, president of the American Association of Homes and Services for the Aging also hailed the idea of a quality rating system, but questioned whether there is adequate public oversight.
“Numerous expert opinions and reports speak to its inconsistency, subjectivity, lack of timeliness and unintelligibility to the public,” Minnix said in a statement.
Meanwhile, AARP issued a statement applauding the rating system.
“The star rating system proposed today could make it easier for families to identify facilities that consistently provide quality service and safety for their residents,” said AARP Executive Vice President John Rother.
“AARP is also hopeful that added transparency will spur the industry to improve the performance of every nursing home. We look forward to working with CMS to refine the rating system announced today as we work toward making ‘Nursing Home Compare’ an even more valuable tool for families in need of long-term care.”
The Center for Medicare Advocacy said it supported CMS’ intent but questioned the reliability of data that are based on industry reports.
“Two of the three criteria that CMS plans to use — quality measures and staffing data — are self-reported by nursing facilities and are inaccurate,” said Toby S. Edelman, senior policy attorney with the Center for Medicare Advocacy.
“Too often, nursing facilities report that residents are doing much better than they really are and that they have more staff than they really have. Relying on nursing homes to describe accurately how well they are doing - and reporting that information as fact - just doesn’t make sense.”
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Competitive bid delay bill introduced
Amid growing indications that Congress may block Medicare’s plan to limit medical equipment suppliers to the winners of a controversial competitive bid process, two key lawmakers today introduced a bill to delay the program by 18 months.
Instead of allowing the program to start July 1 in 10 metropolitan areas including South Florida, the bill would cut Medicare payments for the equipment by 9.5 percent nationwide next year. Payments would increase 2 percent in 2014.
The bill was sponsored by Reps. Pete Stark, D-Calif., and Dave Camp, R-Mich., the bipartisan leaders of the House Ways and Means health subcommittee, which oversees Medicare. Among its cosponsors were the chairmen of the House Ways and Means Committee, the House Commerce Committee and Minority Leader John Boehner, R-Ohio.
With that kind of heavyweight support, this bill appears to be on a fast track.
Meanwhile, similar heavy support has been expressed in the Senate. Sen. Chuck Grassley, R-Iowa, the ranking Republican on the Senate Finance Committee, inserted an 18-month delay in his Medicare bill addressing physician payments. The committee’s chairman, Sen. Max Baucus, D-Mont., also embraced the delay and promised he would have included the language of the Stark-Camp bill in his version of the Medicare doctor payment bill if it had won today’s cloture vote.
Medicare officials have touted the program — which was mandated in the 2003 Medicare law — as a way of reducing rampant fraud in Medicare bills for medical equipment, and proclaimed that the competitive bids would reduce the average cost for equipment such as oxygen and power wheelchairs by about 26 percent.
Peter Ashkenaz, a spokesman for the Centers for Medicare and Medicaid Services, said, “Any delay in the implementation of the program will delay the savings that Medicare beneficiaries will see when they buy or rent their medial equipment and supplies from fully accredited suppliers.”
But long-time medical equipment suppliers such as John Mieras, vice president of Advance Medical Support Inc., a Palm Beach Gardens-based national mail-order diabetes supply company, said the bid process was severely flawed.
Mieras said the winning bidders, in many cases, were companies that did not have previous experience selling the equipment they were selected to supply and were not licensed to sell in the geographic areas for which they received winning bids.
Furthermore, Mieras said many of the winning bids were based on companies offering “the least expensive generic products straight from China.” Mieras said companies that submitted bids based on the cost of name-brand products were not selected.
“They are taking away all of the choice, and all of the name brands, and all of the top models from everyone on Medicare, and they’re just not telling anybody that,” Mieras said.
Stark said the bill was introduced because “the Bush administration designed this program with blinders on to the needs of beneficiaries and the small companies that make up most of the DME industry. But, as I told the industry from the start, this is no free lunch. This bill requires the DME industry to finance the cost of delaying the program.”
Camp said the implementation of the bid process “has been flawed and needed to be fixed. This bill provides us with the time to get the program right and ensure we are reducing costs while protecting beneficiaries in the long run. Equally important, this bill requires that we move forward with competitive bidding as a way to reduce costs.”
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Medicare bill falls short
Facing a June 30 deadline before scheduled Medicare pay cuts to doctors take effect, the Senate backed away Thursday from a bill that would have increased physicians pay but slashed payments to private managed care plans.
The 54-39 procedural vote, with nine Republicans joining all the Democrats present, fell six votes short of the 60 needed to proceed. Among those not voting were presidential candidates Barack Obama, D-Ill., and John McCain, R-Ariz. Florida Sens. Bill Nelson, a Democrat, voted to proceed; Mel Martinez, a Republican, voted against continuing with the bill.
The votes means the two sides are likely to continue negotiations which have been on-going since last year. The 10.6 percent pay cut — the result of a Medicare formula set up several years ago to limit payments to physicians — originally had been scheduled to take effect at the beginning of this year, but Congress agreed in December to temporarily delay it until July 1 while lawmakers searched for ways to pay for eliminating the cut.
Doctors have repeatedly warned that if the cuts take place, many of them will refuse to accept new Medicare patients.
Congress could agree to simply extend the delay on the pay cuts, but that would mean Medicare’s 44 million beneficiaries would pay higher premiums next year to help finance the higher-than-scheduled payments to doctors this year.
Both parties have offered plans to avert the pay cut, but differ over how to pay for the increase and what impact the increase will have on premiums.
The bill that failed to pass the procedural hurdle was sponsored by Senate Finance Committee Chairman Max Baucus with support from most Democrats and a handful of Republicans. It would avert the pay cut and, instead, increase doctors’ pay rates by 0.5 percent for the remainder of this year and another 1.1 percent in 2009.
But Baucus’ bill would slash payments to private Medicare Advantage managed care plans, which a congressional advisory panel says are paid roughly 13 percent more than for traditional fee-for-service coverage.
The Baucus bill also would include a “hold harmless” provision that would keep the increase in physicians’ payments from being included in calculating next year’s Medicare Part B premiums.
An alternative bill by Sen. Charles Grassley of Iowa, the Finance Committee’s ranking Republican, would also avert the pay cut and raise payments by 0.5 percent this year and 1.1 percent next year.
But Grassley’s bill would not cut Medicare Advantage plans as deeply as Baucus’ and would not prevent Part B premiums from increasing to help pay for the doctors’ pay raise.
Grassley’s bill would also delay for 18 months Medicare’s plan to begin restricting the suppliers of durable medical equipment — such as medical oxygen and power wheelchairs. Baucus promised that he would offer a similar provision if his bill passed the procedural hurdle.
Both the American Medical Association and AARP, the nation’s largest organization for those 50 and older, endorsed Baucus’ bill. But Grassley and other Republicans warned that Baucus’ bill would result in at least a temporary pay cut to doctors because President Bush has threatened to veto any bill that included substantial cuts in Medicare Advantage payments. In that case, Grassley said, a Medicare bill might not be adopted until the fall.
Grassley urged the Senate to defeat the procedural motion to force both sides to continue negotiations. But Senate Majority Leader Harry Reid urged senators to support the motion and attempt to amend the bill on the floor next week.
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SHIP programs get $15 million to advise low income seniors
Medicare is sending another $15 million to State Health Insurance Assistance Programs, commonly known as SHIPs, particularly aimed at helping them advise low-income beneficiaries how they can apply for subsidies and lower rates under the Medicare prescription drug program.
The $15 million is in addition to $36 million distributed on April 1 and another $1.5 million scheduled to be parceled out in September. The total is $20 million higher than last year.
Fifteen million bucks seems like a lot of money, but it doesn’t go far when spread among all 50 states. Florida’s share is about $830,000; Georgia gets roughly $380,000; Ohio, $540,000; North Carolina $465,000 and Colorado nearly $160,000.
SHIPs are state programs that rely on community networks to give personal assistance to Medicare beneficiaries who need help understanding and navigating the program.
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New AMA ad aimed at Congress
The ad’s headline says “Physicians provide state of the art care to seniors. Too bad Medicare is still 10 years behind.”
The text of the ad says: “Doctors continue to invest in technology and equipment to heighten efficiency and improve the quality of patient care. If Congress expects that to continue, it must fix the problem that’s causing Medicare physician payments to drop below 2001 rates.
“As the costs of practicing medicine go up, Medicare payments need to keep pace so that seniors have access to the best possible care.
Payments must reflect costs. It’s time for Congress to provide positive Medicare physician updates.”
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GOP Medicare package unveiled
Sometime this month, Congress will return to a Medicare package to avert a 10.1 pay cut for physicians that is scheduled to begin July 1.
Bipartisan negotiations have broken down in the Senate, so Chuck Grassley of Iowa, the ranking Republican on the Senate Finance Committee, today released the GOP provisions for a proposed deal.
Instead of the scheduled 10.1 percent pay cut, doctors would continue receiving a 0.5 percent pay raise through December and an additional 1.1 percent increase for 2009 as recommended by the Medicare Payment Advisory Commission.
See the full proposal here.
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New rights for hospice patients
For the first time in a quarter-century, Medicare hospice patients would get new rights about their end-of-life care under a proposed rule scheduled to be published Thursday.
Under the rule, which would take effect Dec. 2, Medicare hospice patients would have greater rights to effective pain management, the right to refuse treatment, and the right to choose their own physicians. Patients also would be entitled to participate in their treatment plan.
Although many hospices allow patients to participate in their treatment decisions, this is the first time Medicare has explicitly outlined those rights as part of its regulations.
Nearly one million Medicare beneficiaries receive hospice or palliative — pain management — at more than 3,000 Medicare-approved hospices nationwide.
“As more patients and their families come to understand and select hospice care, we felt it was critical to outline what rights patients have to control the care they receive in their final days,” Kerry Weems, acting administrator of the Centers for Medicare and Medicaid Services, said in a statement.
“End-of-life care has changed markedly in the past 25 years and it is time to update our regulations to reflect advances in medicine and hospice industry practices as well as patient rights,” Weems said.
Unlike traditional health care aimed a curing patient, hospice care is chosen by some patients with terminal illnesses who wish for forgo further curative treatment in favor of pain management and services aimed at comforting the patient and family.
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Lawmakers urge delay in bid program
Two letters signed by 132 members of Congress this week urge a one-year delay in Medicare’s implementation of a competitive bidding program for home medical equipment such as oxygen, wheelchairs and hospital-style beds.
The competitive bid program is slated to begin July 1 in 10 metropolitain areas: Charlotte, Cincinnati, Cleveland, Dallas-Ft. Worth, Kansas City, Miami, Orlando, Pittsburgh, Riverside, and San Juan. Next year, another 70 cities are scheduled to be added.
The letters, authored by Reps. John Tanner, D-Tenn., David Hobson, R-Ohio, and Jason Altmire, D-Pa., question the conduct of the recent bidding round in which numerous bids were thrown out because the Medicare contractor said some pages were missing.
“At the very least, an internal review should be conducted to ensure the accuracy and effectiveness of the criteria for future bidding. We all agree that it is of the utmost importance that we protect access to quality medical supplies for all of Medicare beneficiaries and people with disabilities. Therefore, we urge that the implementation of Round 1 be delayed for at least a year,” the letters said.
Tyler J. Wilson, president and CEO of the American Association for Homecare, hailed the development.
“This bidding program has been ill-conceived, poorly planned, and a wholly mishandled effort on the part of CMS,” Wilson said, referring to the Centers for Medicare and Medicaid Services. “It will put thousands of good home care providers out of business and patients’ access to quality home medical equipment and services will suffer as a result. We are pleased that so many members of the House recognize the magnitude of these problems and have gone on record to urge delay and review of the program.”