One week after it declined to say how it would find the $124 billion in Medicare savings called for in its fiscal 1997 budget, the Clinton administration last week released details of the reductions.The spending restraints include nearly $30 billion in net hospital cuts between fiscal 1997 and 2002.The White House plan makes changes to the provision to allow provider-sponsored networks to contract with Medicare, according to administration officials (March 4 , p. 2).Under the latest White House plan, the federal pre-emption of state insurance rules has been broadened. However, states can reimpose their own standards after 1999 if the standards are first approved by HHS.Providers have s ought broader federal oversight of the networks, believing that state regulators are biased in favor of insurance companies.Other wrinkles in the latest proposal are:
Expanding the exceptions to the physician self-referral ban. New exceptions would be granted for services furnished in a shared facility or in ambulatory surgical centers and hospices.
Changing the way Medicare managed-care plans would be paid. Under the new plan, graduate medical education a nd disproportionate-share payments for treating large numbers of poor people would be taken out of the managed-care reimbursement and funneled directly to hospitals.
Extending nationwide the fraud-and-abuse initiative called "Operation Restore Trust," which is now operating in five states.