A federal advisory panel is considering sharp reductions in Medicare provider reimbursements, a cap on federal Medicaid acute-care expenditures and elimination of hospital disproportionate-share payments to reduce entitlement spending.
The Bipartisan Commission on Entitlement and Tax Reform is also considering a number of increases in beneficiary copayments and premiums.
Medicare spending is expected to reach nearly $275 billion by 1999, up from $143 billion in 1993, according to estimates from the Congressional Budget Office.
The 32-member commission, composed of congressional business and labor leaders and economists, is to meet later this week to vote on final recommendations to Congress.
The commission outlined options for federal spending but it did not estimate how much each item would save. However, most of their proposals were included in at least one healthcare reform plan in the past year, and savings listed come from those plans. Unless otherwise noted, savings estimates are for a 10-year period.
The options include:
Adjusting reimbursements for inpatient capital expenditures to reflect more accurate data and cost projections. Savings: $16 billion.
Basing the Medicare Volume Performance Standard on real growth in gross domestic product. Currently, it's based on a number of factors, including volume and intensity of cases, and changes in technology costs. Savings: $24.5 billion.
Establishing cumulative growth targets for physician sevices. Medicare physician reimbursements would be pegged to a baseline level and updated only for inflation and changes in enrollment. Savings: $63.1 billion.
Reducing payments to physicians under the Medicare fee schedule by 3%, except for primary-care services, which would not be reduced. Savings: $5.6 billion for one year.
Eliminating the Medicare disaproportionate-share adjustment and substitute a voucher system. Savings: $34.1 billion.
Eliminating overpayments for hospital outpatient services that occur because of the Medicare beneficiary copayment formula. Savings: $36 billion.
No estimate of savings is available for capping federal Medicaid acute-care expenditures.