Medicare Compliance & Reimbursement

Particularly on the Republican side, members of Congress often call for tighter controls on entitlement spending. But when the matter comes down to cutting funds from particular health-care programs and providers in their own neighborhoods, most prove less willing.

Case in point: Last year several House members took the Medicare Payment Advisory Commission to task, complaining that MedPAC habitually recommended reimbursement increases — or at least insufficient cuts — that would cost the federal government too much money.

Nevertheless, when MedPAC Chair Glenn Hackbarth showed up at the House Ways and Means Health Subcommittee March 9 bearing what ought to have been good news — a March 2003 MedPAC report purportedly containing evidence that many provider sectors can sustain fiscal year 2004 reimbursement cuts without serious harm — the tables got rapidly turned. Numerous Republican members grouchily asserted that the panel’s findings were wide of the truth and that providers likely wouldn’t be able to sustain cuts.

“I’m frustrated by the lack of agreement between [MedPAC’s] analysis and the statements of individual provider groups,” said Chair Nancy Johnson (R-CT).

The payment slowdowns recommended by MedPAC aren’t even in the ballpark of what House Budget Committee Chair Jim Nussle’s (RIA) plan calls for, says a hospital industry source. For example, MedPAC recommends cutting the Medicare inpatient-hospital reimbursement rate by 0.4 percentage points below the so-called hospital marketbasket rate. That amounts to less than a $6 billion one-year cut, given that a one percentage point cut from marketbasket is estimated to be equivalent to about $13 billion, the source explains.

This figure pales in comparison to the $215- billion ten-year decrease — an average of over $21 billion a year — that House budgeters call for in hospitals’ Part A Medicare reimbursements. And in addition to the Part A cut, the House budget mandates Medicaid cuts that also will affect hospitals.