Federal actuaries said that a handful of measures touted as cost-savers in the Senate’s health overhaul package could end up costing the government instead and potentially drive providers out of the marketplace.
Cost-saving reform measures questioned
The CMS’ Office of the Actuary estimates that a provision to base provider reimbursement rates in part on productivity gains and another to create an independent Medicare advisory commission would likely have a muted effect on costs—if any at all.
The reimbursement measure, which lawmakers expect would force providers to maximize their efficiency, instead could drive them out of business because it’s unlikely they could meet the benchmarks set out in the bill.
“Over time, a sustained reduction in payment updates, based on productivity expectations that are difficult to attain, would cause Medicare payment rates to grow more slowly than—and in a way that was unrelated to—the providers’ costs of furnishing services to beneficiaries,” according to the analysis. “Thus, providers for whom Medicare constitutes a substantive portion of their business could find it difficult to remain profitable and, absent a set of legislative interventions, might end their participation in the program.”
Those productivity adjustments could drive 20% of Part A providers into the red over a 10-year timeframe, according to the analysis.
The CMS also said that the effects of a provision to create a new Independent Medicare Advisory Board, which would be charged with making certain Medicare payment recommendations based on the consumer price index, would be slight because many of the largest cost-drivers, like hospitals, are exempt.
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