Medicare Monitor

Medicare Monitor

The Palm Beach Post's veteran Washington correspondent, Larry Lipman, tracks policy makers and interest groups who are shaping the future of the federal health insurance program for the elderly.

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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:

Part A Covers inpatient hospital care as well as nursing home, home health and hospice care. Nearly all elderly and disabled Americans qualify for Part A coverage.
Financed by a 2.9 percent payroll tax divided equally between employees and employers.

Part B Covers outpatient care, doctor’s services, durable medical equipment, home health visits and preventive care. Part B coverage is voluntary, but roughly 40 million are enrolled.
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.

Part C Medicare Advantage managed care plans provide health care normally covered by Medicare Parts A and B. They may also provide some other benefits, including prescription drugs, not covered by traditional Medicare. Oart C is voluntary; about 7 million beneficiaries are enrolled.
Financed by Medicare and beneficiary premiums, which vary among plans.

Part D Medicare prescription drug plans come in two types, those that just cover prescription drugs and those that cover drugs as part of a broader managed care benefit. Part D is voluntary. About 9.2 million beneficiaries are in stand-alone drug plans and about 5.1 million are in managed care drug 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 > February > 20 > Entry

Medicare says it could ‘bundle’ dialysis payments

By Larry Lipman | Wednesday, February 20, 2008, 05:46 PM

Medicare may change the way it pays kidney dialysis centers for end stage renal disease treatments.

According to a report sent to Congress on Wednesday, Medicare could use a “prospective payment system” that sets a specific bundled price for dialysis care. Currently, Medicare pays about 60 percent of such care through a prospective payment system. But it pays individually for items such as drugs, laboratory services, supplies and blood products.

Bundling all of the payments into one lump sum would benefit patients, said Kerry Weems, acting administrator for the Centers for Medicare and Medicaid Services.

Rep. Pete Stark, D-Calif., chairman of the Ways and Means health subcommittee, has been pressing for bundled dialysis payments and said the report shows Medicare is ready to make it happen.

“I have been very concerned that Medicare’s overpayments for the anti-anemia drug Epogen create a perverse incentive for dialysis centers to raise doses, which the FDA warns can put dialysis patients at increased risk of heart attack, heart failure, stroke and death,” Stark said. “A well-designed bundled payment system will remove the incentive to over-utilize drugs, and encourage more appropriate provision of care.

“It is critically important that a fully bundled payment system accommodates the individual clinical needs of the patient, and the variance in treatment that may be needed to ensure proper care. It cannot be a ‘one-size-fits-all’ system. It must also include rigorous quality reporting and monitoring. The CMS report makes it clear that this type of flexibility and quality control is attainable within a bundled system.

“None of this will happen tomorrow,” Stark said. “It will take a couple of years to design and implement these changes, but I bet the system could be up and running by 2011. I wouldn’t be surprised to hear calls for delay and other scare tactics generated by those in the industry who make money off of the status quo. Regardless, I will work to enact legislation this year that gets this much-needed payment reform underway.”

“It is critically important that a fully bundled payment system accommodates the individual clinical needs of the patient, and the variance in treatment that may be needed to ensure proper care. It cannot be a ‘one-size-fits-all’ system. It must also include rigorous quality reporting and monitoring. The CMS report makes it clear that this type of flexibility and quality control is attainable within a bundled system.

“None of this will happen tomorrow,” Stark said. “It will take a couple of years to design and implement these changes, but I bet the system could be up and running by 2011. I wouldn’t be surprised to hear calls for delay and other scare tactics generated by those in the industry who make money off of the status quo. Regardless, I will work to enact legislation this year that gets this much-needed payment reform underway.”

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