It would be illegal for physicians with ownership in new specialty facilities to refer patients to the facilities under a budget reconciliation bill released by the Senate Finance Committee. The bill would cut a net $5.8 billion from Medicare and $4.3 billion from Medicaid over five years, for a total savings of about $10 billion. The committee is scheduled to vote on the bill Monday; it would then be forwarded to the Senate Budget Committee to include in a larger budget reconciliation package. Disagreement among Finance Committee members had threatened to derail the bill, but the most controversial provision -- covering Medicaid costs for states hit by Hurricane Katrina -- was made less generous. Meanwhile, a provision to help rehabilitation hospitals was made more generous, reducing the percentage of admissions required to fall within certain DRGs to 50% for two years.
The bill also would require HHS to implement pay-for-performance for a range of providers, including hospitals, doctors and nursing homes, and would extend through 2006 a guarantee that rural hospitals won't lose revenue under the new outpatient prospective payment system. As previously reported, the bill would raise Medicare rates for doctors 1% in fiscal 2006 and eliminate a fund to encourage private health plans to participate in the new Medicare drug benefit. -- by Tony Fong