A draft of the American Medical Association plan for reforming Medicare projects program growth rejections of $162.2 billion over seven years, but virtually all those savings would come from hospitals and beneficiaries.
The plan, which is the AMA's bargaining chip as Congress seeks healthcare savings on a path to a balanced budget, proposes squeezing $90 billion in savings from hospitals, home health providers and nursing homes that receive payment from the Medicare Part A trust fund.
The AMA's spending proposals are part of a plan that would modernize Medicare by paying a fixed amount toward the premiums of health plans that beneficiaries can choose. Beneficiaries choosing plans that cost more than the Medicare payment would make up the difference.
The AMA, which unveiled an outline of the plan at its House of Delegates meeting in Chicago last month (June 26, p. 2), also proposes raising beneficiary contributions to Part B insurance by $32.5 billion.
Among the AMA proposals, most of which were part of a House Budget Committee plan, were a revision of the disproportionate-share hospital payment policy, which the AMA projects would save $33.2 billion in seven years, and a restructuring of medical education payments to teaching hospitals to save an estimated $13.2 billion. Disproportionate-share funds pay hospitals extra money for treating large numbers of poor patients.
But Medicare actually would pay $14.5 billion more over seven years under an AMA proposal that allows doctors to set their own Medicare fees and compete for beneficiaries. Under that proposal, beneficiaries would receive a rebate if they saved the government money by choosing a less expensive doctor but would make up the difference when the doctor charges more than a government rate.
Though the AMA did endorse most of the cuts that would hit hospitals in the committee's proposal, it did not support the plan's $18.6 billion in physician payment cuts. AMA officials said the association's proposal sacrifices the financial security of predictable Medicare fees to fend off across-the-board payment cuts and gain more control over their practices.