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Center for Medicare/Medicaid Services’ impact on private payers

There has been lots of news about Medicare lately; a good round-up is available at California HealthLine. News includes:
Physician reimbursement – the current fee schedule expires in 2006, after which reimbursement is scheduled to decline by 5% annually from 2006 to 2012. While some are predicting, with apparent confidence, that the cuts will be eliminated, it appears that others on Capitol Hill, searching for ways to deliver on Bush’s commitment to cut the Federal deficit, are turning their attention to Medicare.
 Medicare will be covering more services performed at Ambulatory Service Centers. Most of these are minimally invasive surgeries, and many have been performed at ASCs for years. It looks like CMS is just catching up with normal practice. However, some procedures, such as laparoscopic cholecystectomies, which are routinely done in ASCs, will not be covered in this setting by CMS.
 CMS will increase payment for stays in long term care hospitals by 3.4% on July 1 of this year and make it easier for LTC facilities to receive payment for “outlier” cases (those patients that consume significantly more resources).
 Drugs – under pressure from the retail pharmacy industry, CMS will require health plans to cover 90 days of drugs whether they are obtained at a retail or mail order pharmacy.
What does this mean for you?
As goes CMS, so follows commercial insurance. Here are the potential effects.
1. Physician fee cuts – physicians will seek to recover lost income from other payers, and those other payers tend to be their group health, auto, and workers’ comp patients. Watch for cost-shifting

Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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