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The New York Times on Tuesday examined reaction
to the Medicare Payment Advisory Commission's
recommendations to Congress, which include a lower
payment increase for hospitals and a freeze in
payments to nursing homes and home care agencies
in 2006 (Pear, New York Times, 1/18). The recommendations,
which will be formalized in a March report to
Congress, include:
- An
increase in Medicare's physician payment rate
of 2.7% in 2006;
- Establishment
of a quality incentive payment policy for hospitals,
home care facilities and doctors;
- An
increase in payments to hospitals for both inpatient
and outpatient care by market basket minus 0.4
percentage points in 2006 -- resulting in an
increase in payments by 2.9%, instead of the
full market basket update of 3.3%;
- A
freeze in prospective payment rates for home
care agencies and skilled nursing facilities
in 2006;
- Establishment
of a quality incentive payment policy for hospitals,
home care facilities and doctors;
- An
increase in the reimbursement rate for providers
of kidney dialysis services by market basket
minus 0.4 percentage points, resulting in a
net increase of 2.5%; an extension of the existing
moratorium on construction of doctor-owned specialty
hospitals until Jan. 1, 2007;
- Establishment
of standards for providers of diagnostic-imaging
services and physicians who interpret the images;
and
- The
creation of a monitoring system for physicians'
use of tests and procedures (Kaiser
Daily Health Policy Report, 1/14).
Reaction
Carmela Coyle, senior vice president of the
American Hospital Association, said her group
is "very disappointed" about the proposal to increase
Medicare hospital payments by market basket minus
0.4 percentage points. She said, "The commission's
own data show that the financial condition of
hospitals is worsening and that hospitals lose
money treating Medicare patients," adding, "Congress
may use this recommendation as a rationale for
budget cuts that address the deficit, not Medicare
policy." Daniel Sisto, president of the Healthcare
Association of New York State, said, "We are
outraged," adding that the group would lobby against
the recommendation. Ralph Muller, a member of
MedPAC and a CEO of the University
of Pennsylvania Health System, said he advocated
for a full market-basket update for hospitals,
noting, "Malpractice insurance premiums have been
going up 30% to 40% a year for three years. Nursing
costs have been increasing because there's clear
evidence that mortality is lower when hospitals
have more nurses and better-educated nurses. Prescription
drug costs have been going up 10% to 15% a year.
Diagnostic-imaging services have been going up
at double-digit rates." However, MedPAC Chair
Glenn Hackbarth said hospitals that consistently
lose money on Medicare beneficiaries often are
"poor performers" that "may not meet the congressional
standard of efficient providers" (New York Times,
1/18).
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