WASHINGTON OUTLOOK;`96 MAY DEAL CHALLENGING HAND
Skip to main content
MDHC_Logotype_white
Subscribe
  • My Account
  • Login
  • Subscribe
  • News
    • This Week's News
    • COVID-19
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • People
    • Regional News
    • Digital Edition
    • Sticking to Mediterranean diet is good for the brain
      Joe Biden
      Revamp of the nation's vaccination effort may not be enough
      A man in a room with servers.
      Momentum grows to outsource hospital tech functions in 2021
      Firefighter walking towards forest fire.
      Wildfires producing more harmful pollution
    • COVID-19 hastens hospitals' revenue cycle outsourcing moves
      Operation Warp Speed Dr. Moncef Slaoui, Pfizer Group President Angela Hwang, Moderna CEO Stephane Bancel, CVS Health Executive Vice President Karen Lynch and McKesson CEO Brian Tyler participate in a panel discussion on the COVID-19 vaccine.
      Hospitals, drug companies strive to stand out virtually at JPM
      Dr. Bruce Siegel
      By protecting the healthcare safety net, Biden can put us on the path to a stronger country
      Joe Biden
      Revamp of the nation's vaccination effort may not be enough
    • The Check Up: Trenda Ray
      The Check Up: Trenda Ray of the University of Arkansas for Medical Sciences
      Trenda Ray
      Q&A: Arkansas nursing leader looking for creative staffing solutions as COVID cases surge
      Cook Lydia 4x6_i.jpg
      Northeast Ohio health systems increase community benefit values in 2019
      Vaccine rollout hits snag as health workers balk at shots
    • CMS approves rule forcing insurers to ease prior authorization
      COVID-19 still a big uncertainty for insurers in 2021
      Health insurers' outlook boosted after Dems' Georgia win
      humana_i.jpg
      Humana supports Ohio not-for-profits with $500,000
    • Joe Biden
      Revamp of the nation's vaccination effort may not be enough
      CMS will raise Medicare Advantage plan payments by 4.08% in 2022
      CMS approves rule forcing insurers to ease prior authorization
    • Operation Warp Speed Dr. Moncef Slaoui, Pfizer Group President Angela Hwang, Moderna CEO Stephane Bancel, CVS Health Executive Vice President Karen Lynch and McKesson CEO Brian Tyler participate in a panel discussion on the COVID-19 vaccine.
      Hospitals, drug companies strive to stand out virtually at JPM
      Intermountain, Trinity, Memorial Hermann behind $300M private equity fund
      Operation Warp Speed to bump up McKesson's stock price
      Reporter's notebook: J.P. Morgan's 2021 health conference
    • A man in a room with servers.
      Momentum grows to outsource hospital tech functions in 2021
      5 things to know about Google's $2.1B Fitbit acquisition
      Providence bets on machine-learning, consolidating data centers
      Mental health treatment was most common telehealth service during COVID
    • Sticking to Mediterranean diet is good for the brain
      Chance of COVID-19 triage care looms over Arizona hospitals
      U.S. ramps up vaccinations to get doses to more Americans
      367146427.jpg
      Should businesses mandate that staff get the COVID vaccine?
    • Cone Health CEO, CFO to depart amid pending Sentara merger
      Tower Health's finance chief resigning after years of steep losses
      AHRQ director Gopal Khanna resigns in response to Capitol riot
      Brigham president stepping down after Moderna controversy
    • Midwest
    • Northeast
    • South
    • West
  • Insights
    • ACA 10 Years After
    • Best Practices
    • InDepth Special Reports
    • Innovations
    • The Affordable Care Act after 10 years
    • New care model helps primary-care practices treat obesity
      doctor with patient
      COVID-19 treatment protocol developed in the field helps patients recover
      Rachel Wyatt
      Project to curb pressure injuries in hospitals shows promise
      Yale New Haven's COVID-19 nurse-staffing model has long-term benefits
    • Michellene Davis
      Healthcare leadership lacks the racial diversity needed to reduce health disparities
      Dr. James Hildreth
      How medical education can help fight racism
      Modern Healthcare InDepth: Breaking the bias that impedes better healthcare
      Videos: Healthcare industry executives describe their encounters with racism
      Quotes from rebadged employees
      Outsourcing IT, revenue cycle takes toll on internal culture
    • A woman with a wearable sensor talking to her provider.
      Wearable sensors help diagnose heart rhythm problems in West Virginia
      self service station
      COVID-19 pushes patient expectations toward self-service
      Targeting high-risk cancer patients with genetics
      A nurse holds up a phone with a message to a family member saying surgery has started.
      Texting, tablets help hospitals keep family updated on patient care
  • Transformation
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Highmark Health inks six-year cloud, tech deal with Google
      Study: 1 in 5 patients report discrimination when getting healthcare
      HHS proposes changing HIPAA privacy rules
      Android health records app launches at 230 health systems
    • California hospitals prepare ethical protocol to prioritize lifesaving care
      Amazon, JPMorgan Chase, Berkshire Hathaway disband Haven
      Digital pathways poised to reshape healthcare continuum in 2021
      Healthcare was the hardest hit by supply shortages across all U.S. industries
    • A woman with a wearable sensor talking to her provider.
      Wearable sensors help diagnose heart rhythm problems in West Virginia
      New care model helps primary-care practices treat obesity
      How hospitals are building on COVID-19 telehealth momentum
      Researchers: Hospital price variation exacerbates health inequities
    • MedPAC votes to boost hospital payments, freeze or cut other providers
      Most Next Gen ACOs achieved bonuses in 2019
      Congress recalibrates Medicare Physician Fee Schedule after lobbying
      CMS approves rule to encourage value-based drug pricing
  • Data/Lists
    • Rankings/Lists
    • Interactive Databases
    • Data Points
    • Health Systems Financials
      Executive Compensation
      Physician Compensation
  • Op-Ed
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
    • Wellstar CEO calls adapting for the pandemic her bold move
      Howard P. Kern
      Recognizing the value of telehealth in its infancy
      Dr. Stephen Markovich
      A bold move helped take him from family doctor to OhioHealth CEO
      Dr. Bruce Siegel
      Why taking a hospital not-for-profit was Dr. Bruce Siegel’s boldest move
    • Barry Ostrowsky
      Ending racism is a journey taken together; the starting point must be now
      Laura Lee Hall and Gary Puckrein
      Increased flu vaccination has never been more important for communities of color
      John Daniels Jr.
      Health equity: Making the journey from buzzword to reality
      Mark C. Clement and David Cook
      We all need to 'do something' to fight inequities and get healthcare right, for every patient, every time
    • Dr. Bruce Siegel
      By protecting the healthcare safety net, Biden can put us on the path to a stronger country
      Healing healthcare: some ideas for triage by the new Congress, administration
      Dr. Sachin H. Jain
      Medicare for All? The better route to universal coverage would be Medicare Advantage for All
      Connectivity: a social determinant of health that can exacerbate all the others
    • Letters: Eliminating bias in healthcare needs to be ‘deliberate and organic’
      Letters: Maybe dropping out of ACOs is a good thing for patients
      Letters: White House and Congress share blame for lack of national COVID strategy
      Letters: VA making strides to improve state veterans home inspections
    • Sponsored Content Provided By Optum
      How blockchain could ease frustration with the payment process
      Sponsored Content Provided By Optum
      Three steps to better data-sharing for payer and provider CIOs
      Sponsored Content Provided By Optum
      Reduce total cost of care: 6 reasons why providers and payers should tackle the challenge together
      Sponsored Content Provided By Optum
      Why CIOs went from back-office operators to mission-critical innovators
  • Awards
    • Award Programs
    • Nominate
    • Previous Award Programs
    • Other Award Programs
    • Best Places to Work in Healthcare Logo for Navigation
      Nominations Open - Best Places to Work in Healthcare
      Nominations Open - Health Care Hall of Fame
      Nominations Open - 50 Most Influential Clinical Executives
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Top 25 Minority Leaders
    • Top 25 Women Leaders
    • Excellence in Nursing Awards
    • Design Awards
    • Top 25 COOs in Healthcare
    • 100 Top Hospitals
    • ACHE Awards
  • Events
    • Conferences
    • Galas
    • Webinars
    • COVID-19 Event Tracker
    • Leadership Symposium
    • Healthcare Transformation Summit
    • Women Leaders in Healthcare Conference
    • Workplace of the Future Conference
    • Strategic Marketing Conference
    • Social Determinants of Health Symposium
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Minority Leaders Gala (2022)
    • Top 25 Women Leaders Gala
  • Listen
    • Podcast - Next Up
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
    • Carter Dredge
      Next Up Podcast: Ready, set, innovate! Innovation and disruption in healthcare
      Next Up Podcast: COVID-19, social determinants highlight health inequities — what next?
      Next Up Podcast: Saving Rural Health
      Ceci Connolly
      Next Up Podcast: How to navigate the murky post-election waters
    • An older man wearing a mask receiving a vaccine.
      Beyond the Byline: Verifying information on the chaotic COVID-19 vaccine rollout
      doctor burnout
      Beyond the Byline: How healthcare supply chain struggles contribute to employee burnout
      Beyond the Byline: Covering race and diversity in the healthcare industry
      Beyond the Byline: How telehealth utilization has impacted investor-owned company earnings
    • Leading intention promote diversity and inclusion
      Introducing Healthcare Insider Podcast
    • The Check Up: Trenda Ray
      The Check Up: Trenda Ray of the University of Arkansas for Medical Sciences
      The Check Up: Dr. Kenneth Davis
      The Check Up: Dr. Kenneth Davis of Mount Sinai Health System
      The Check Up: Dr. Thomas McGinn
      The Check Up: Dr. Thomas McGinn of CommonSpirit Health
      The Check Up: Mark Ganz
      The Check Up: Mark Ganz of Cambia Health Solutions
    • Video: Ivana Naeymi Rad of Intelligent Medical Objects
  • MORE +
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. News
January 08, 1996 12:00 AM

WASHINGTON OUTLOOK;`96 MAY DEAL CHALLENGING HAND

Eric Weissenstein
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    Like any good sequel, 1996 will try to top the 1995 original. There'll be even bigger budget battles, more provider uncertainty, and a presidential election thrown in for good measure.

    Dragging on early this year will be the federal government's great unfinished business-the seven-year balanced-budget plan that is still being negotiated by congressional Republicans and the White House. Like last year, that will mean more uncertainty as providers scramble to deal with slower payment growth and position themselves to compete in a Medicare marketplace already roiled by managed care.

    Budget impasse. One incipient 1995 story line that will be completely played out in the 1996 sequel is the presidential election. With two of the three primary budget negotiators, Senate Majority Leader Bob Dole (R-Kan.) and President Clinton, in the race, the budget and the election are intertwined as never before.

    Opinions vary on whether the election makes it more or less likely that a budget agreement will be reached in 1996.

    "I think both sides are going to stick to their positions until somebody's poll numbers go through the floor," said James Scott, president of the American Healthcare Systems/Premier Institute. "If that doesn't happen, they will both be happy to take it to the American people and see if someone can articulate their position well enough to make a real difference."

    But others say both parties' nominees will want to go into the election with the budget issue behind them.

    "Neither side can afford to be seen as not able to pass a budget," said Jack Bresch, director of government relations for the Catholic Health Association.

    Medicare reform debate.All 1995's other blockbuster issues are guaranteed to be reprised in 1996. For providers, that means the issue of provider-sponsored networks will be back.

    Under all three of the major budget plans that have been introduced, provider networks would be allowed to contract directly with Medicare to enroll beneficiaries in managed-care plans. Networks would be made up of a combination of physicians, hospitals, nursing homes and other providers. How those provider groups would be formed and regulated became one of the most contentious issues in the Medicare reform debate last year.

    "We are moving on the assumption that there will be provisions for (provider-sponsored networks) of some form included in the final budget," said Richard Pollack, executive vice president of the American Hospital Association. "Hospitals have to be preparing themselves for that eventuality and to move quickly when it happens."

    If a budget bill is passed early in the year, it will likely take effect in early 1997. That means Medicare beneficiaries will be making decisions on whether to join a managed-care plan during an open-enrollment period that will start late in 1996.

    "If a budget is passed, say in late January, that means providers may have only six or eight months to get ready to accept Medicare beneficiaries," said Brent Miller, director of government relations for the American Group Practice Association. "That just isn't a lot of time, and I don't know how realistic it is."

    Medicare/Medicaid spending. Another hot 1995 topic that may be even hotter in 1996 is how much the growth in Medicare and Medicaid spending should be slowed. Absent any changes by lawmakers, the Congressional Budget Office estimates that Medicare spending will grow at an average rate of more than 9% a year, from $196 billion in 1996 to $332 billion in 2002. The Clinton administration plan would reduce those projected payments by about $98 billion over seven years while the GOP plan would trim them by $202 billion. The plan introduced by the conservative Democrats in the House, known as the "Blue Dogs," would save $153 billion over the same period.

    "No matter what happens in 1996, providers will continue to be the bank on which Democrats and Republicans alike look to balance the budget," said Frederick Graefe, a lobbyist with the Washington law firm of Baker & Hostetler.

    The conversion factor.Like hospitals, physicians are going to have to prepare for change regardless of whether Congress and the White House reach a budget agreement.

    Under both the congressional GOP balanced-budget proposal and the Clinton administration plan, the base Medicare fee-for-service payment rate would be $35.42, with a two-year transition from a separate surgical rate under the administration plan. The Blue Dog plan includes a slightly higher rate of $36.40.

    That single payment rate, called the "conversion factor," would represent a real cut for some physicians. For example, the updated 1996 surgical payment rate is $40.95 while the primary-care payment rate is $35.55. However, the new rate would be an increase for other nonsurgical services, which are paid at a rate of $34.75.

    The conversion factor is used to establish Medicare fees by multiplying it by a numerical, work-based value assigned to each service provided to a Medicare beneficiary.

    Both the White House and GOP proposals also tie the method of controlling Medicare physician expenditures and calculating future fee increases to medical inflation, growth in real gross domestic product and the ability of physicians to keep spending growth below certain limits.

    But following the ticks of the conversion factor may become less crucial to physicians as more beneficiaries enroll in managed-care organizations and private plans.

    Managed-care revolution. Such a trend mirrors that among private-sector employers, who have tried to restrain their health insurance costs by enrolling employees in HMOs and other types of managed-care organizations.

    In the past, doctors often have viewed managed care as the enemy. But by the time Congress and the Clinton administration finish their work, that may all change.

    "(Doctors are) going to have to get involved in these plans, but that's happening in the private sector anyway," said Charles Huntington, Washington office director for the American Academy of Family Physicians. "It just means more of their patients are involved."

    Like hospitals, physicians will need to use 1996 to prepare to enter the Medicare beneficiary sweepstakes, said Marie Michnich, associate executive vice president of the American College

    of Cardiology. "If (doctors are) not at the table, they're not going to be involved in making those decisions," Michnich said.

    Congressional Republicans, and many outside observers, argue that the GOP and White House budget plans are more similar than they are different, making compromise on Medicare reform possible.

    "The bottom line is that agreeing on the Medicare numbers shouldn't be that difficult," said Lawrence Goldberg, a partner with Deloitte & Touche in Washington. "But for hospitals, that is in some ways irrelevant. The cuts are going to be there no matter what. The real question is how can hospitals best control costs and manage the revenue stream. They have to understand how to accept more capitation and risk."

    The future of Medicaid. Accord on Medicaid reform may be another matter.

    GOP lawmakers and governors are seeking a no-strings-attached block grant that would end the federal entitlement and turn control of the Medicaid program over to the states. In exchange, the states would agree to limit how much the block grants would increase each year.

    The Clinton administration, however, is seeking to retain the federal entitlement and to pay states on a per-capita basis. Those capitated payments also would grow at a capped rate. Supporters argue that such a plan would better shield states from changes in the Medicaid beneficiary population.

    "It is really hard to see where the agreement can come from on Medicaid," said Mary Grealy, executive vice president of the Federation of American Health Systems. "(Medicaid) could be the issue that keeps them from reaching an agreement."

    For nursing home owners, who rely on Medicaid for roughly half their income, the outcome of the Medicaid reform debate is crucial.

    Even if the Clinton administration prevails, it's likely that the governors' clamor for greater flexibility will lead to 50 different Medicaid programs, making it harder to prepare for changes, said Michael Rodgers, senior vice president of the American Association of Homes and Services for the Aging.

    "We're at a little bit of a loss what to tell (our members) to do," Rodgers lamented.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Beyond the Byline: Texas COPA law may pave the way for more hospital M&A - Transcript
    Beyond the Byline: Mining data on insurers' pandemic profits - Transcript
    Sponsored Content
    Get Free Newsletters

    Sign up for free enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today

    The weekly magazine, websites, research and databases provide a powerful and all-encompassing industry presence. We help you make informed business decisions and lead your organizations to success.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS
    • Instagram

    Stay Connected

    Join the conversation with Modern Healthcare through our social media pages

    MDHC_Logotype_white
    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • This Week's News
      • COVID-19
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition
    • Insights
      • ACA 10 Years After
      • Best Practices
      • InDepth Special Reports
      • Innovations
    • Transformation
      • Patients
      • Operations
      • Care Delivery
      • Payment
    • Data/Lists
      • Rankings/Lists
      • Interactive Databases
      • Data Points
    • Op-Ed
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Awards
      • Award Programs
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Top 25 Minority Leaders
        • Top 25 Women Leaders
      • Nominate
      • Previous Award Programs
        • Excellence in Nursing Awards
        • Design Awards
        • Top 25 COOs in Healthcare
      • Other Award Programs
        • 100 Top Hospitals
        • ACHE Awards
    • Events
      • Conferences
        • Leadership Symposium
        • Healthcare Transformation Summit
        • Women Leaders in Healthcare Conference
        • Workplace of the Future Conference
        • Strategic Marketing Conference
        • Social Determinants of Health Symposium
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Minority Leaders Gala (2022)
        • Top 25 Women Leaders Gala
      • Webinars
      • COVID-19 Event Tracker
    • Listen
      • Podcast - Next Up
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • MORE +
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing