Regarding Medicare Cost Cutting > This bears repeating: A Prescription for Ruin

[patrice]

http://www.newsweek.com/2010/08/13/a_prescription_forruin.html

On July 27, Sen. Jon Cornyn (R-Texas) introduced the Health Care Bureaucrats Elimination Act, cosponsored by Sens. Orrin Hatch (R-Utah), Jon Kyl (R-Ariz.), Pat Roberts (R-Kans.) and Tom Coburn (R-Okla.). The legislation doesn’t seek to repeal health-care reform (though many Republicans would also like to do that). Instead, it takes aim at perhaps its most promising cost control: the Independent Payment Advisory Board.

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We talk a lot about the deficit these days. And when we talk about it, what we’re really talking about is how to convince the bond markets that we’ll do what’s necessary to get our health-care spending under control and get our long-term budget into balance. If we don’t convince them, one day the bond markets might conclude that our political system is too weak and divided to cut the deficit, and then they’ll stop lending to us at low rates, sparking a fiscal catastrophe.

Which do you think would make them more confident? Seeing the two parties in a virtuous competition to make the cost controls in the health-care bill even stronger? Or watching as one party tries to systematically strip every cost control out of the first serious effort in memory to attack health-care spending?

We need to prepare for the return of Congress by working on a meme that says something like "Systemic costs from fraud, waste, and abuse ARE Death Panels."

[enlightenment]

1. It might be useful to have a little more detail of the

composition and purpose of the IPAB.

This article is worth reading in its entirety.

http://www.mwe.com/index.cfm/fuseaction/publications.nldetail/object_id/88bb9356-99b2-4307-a550-41bc88595215.cfm

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Here is how the IPAB will operate: If the Actuary of the Centers for Medicare and Medicaid Services determines that Medicare expenditures will exceed a target rate of growth, the IPAB is required to develop proposals to save costs to achieve a minimum reduction in excess expenditures. The target rate of growth is set out in the law, for years prior to 2018, as the average of the consumer price index for all urban consumers (CPI-U) and the medical care component of the CPI-U. For years 2018 and thereafter, the target rate of growth is set as the Gross Domestic Product plus 1.0 percent. If these growth targets are exceeded, the proposals developed by the IPAB must be designed to achieve savings targets, which Congress specified as the lesser of the excess growth rate (projected growth minus target growth) or a defined percentage of program spending (0.5 percent in 2015, 1.0 percent in 2016, 1.25 percent in 2017 and 1.5 percent in 2018 and beyond). IPAB proposals affecting providers (e.g., hospitals, skilled nursing facilities) will not be implemented before 2020. IPAB proposals affecting other suppliers (e.g., physicians) may commence in 2015.

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An IPAB proposal is required to include (a) a recommendation for savings (based upon the criteria summarized above), (b) the rationale for believing the proposal will achieve the target savings, (c) legislative language to implement the proposal and (d) an actuarial opinion to support the belief that the targeted savings are expected to be achieved with the proposal. In developing proposals, the IPAB is instructed to give priority to efforts to extend Medicare solvency. The health reform law instructs the IPAB to develop proposals that (a) improve the health care delivery system and health outcomes, (b) protect and improve Medicare beneficiaries’ access to necessary and evidence-based items and services, and (c) target reductions in Medicare program spending to sources of excess cost growth. Congress specified that IPAB proposals shall not include any recommendation to ration health care, raise revenues, raise Medicare beneficiary premiums, increase Medicare beneficiary cost-sharing (including deductibles, coinsurance and copayments) or otherwise restrict benefits or modify eligibility criteria.

In developing proposals, the IPAB is required to consult with the Medicare Payment Advisory Commission (MedPAC) and with the Department of Health and Human Services (HHS). The IPAB is required to submit its proposals to the President and Congress. Congress may introduce an IPAB proposal as new legislation, but Congress may modify an IPAB proposal only if doing so would achieve savings at least as great as those expected by the IPAB proposal. A key feature of the IPAB proposals is that they shall be implemented automatically by HHS if Congress does not pass legislation meeting target savings.

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The purpose of the IPAB is to reduce Medicare expenditures while maintaining quality and access and without raising out-of-pocket costs for Medicare beneficiaries. Realistically, this can be achieved in only one way: through reductions in provider and supplier payments. Payment reductions are likely to target those areas considered to be drivers of cost growth. High-volume and high-cost services are likely to be targets for IPAB proposals.

[patrice]

2. Thank you, extremely. Will share!

:hi:

[Yo_Mama]

3. It doesn't have anything to do with waste or fraud

It just limits Medicare spending.

Basically, the "doc fix" will now be screened off from Congress, which means that a lot of Medicare beneficiaries aren't going to be getting service.

There is no way to cut costs while increasing or maintaining access.

[patrice]

4. cites?

[Yo_Mama]

5. See the cite above

The target rate of growth is set out in the law, for years prior to 2018, as the average of the consumer price index for all urban consumers (CPI-U) and the medical care component of the CPI-U. For years 2018 and thereafter, the target rate of growth is set as the Gross Domestic Product plus 1.0 percent.

Over the long run, this will limit Medicare spending increases to GDP plus 1%. So if there's a recession, and GDP drops as it did in the recession probably just ending, Medicare increases for that period might be negative, which would require that fees for medical services would be cut.

Tell me what that has to do with waste or fraud?

This piece of the legislation takes a prior initiative, which limited fees based on increases, and takes it OUT OF CONGRESS' hands!!! That prior initiative has always been reversed by Congress because it was limiting beneficiary access. That will end under this legislation. Either coverage has to be limited (say Medicare no longer pays for cancer treatments after a certain age) or reimbursements for services must be cut. Likely you will see a combination of both.