California Healthline Highlights Recent Medicare Developments
Several newspapers recently published articles on developments in Medicare. Summaries appear below.
Medicare this week began mailing letters to the 5.5 million beneficiaries who are dually eligible for Medicare and Medicaid informing them of the prescription drug plan they have been automatically enrolled in under the Medicare drug benefit, which begins Jan. 1, 2006, the San Francisco Chronicle reports. The government is automatically enrolling dual eligibles into prescription drug plans and will subsidize their premiums and cost sharing.
Dual eligibles are permitted to change plans once a month, whereas other Medicare beneficiaries can change plans once during the enrollment period. Enrollment begins Nov. 15.
CMS spokesperson Peter Ashkenaz said, "We needed to get the letters out now, so people know they will either need to take action come Nov. 15 or not take any action and be automatically enrolled in a plan."
However, some health care advocates are concerned that dual eligibles might not be enrolled in a plan that covers the drugs they need or has contracts with a pharmacy in their area, the Chronicle reports.
David Lipschultz, an attorney for California Health Advocates, said, "You have coverage, but you might not have the right coverage" (Colliver, San Francisco Chronicle, 11/3).
Medicare payment rates to home health agencies will increase 2.8%, or a total of $370 million, in 2006, CMS Administrator Mark McClellan said Wednesday in a news release, CQ HealthBeat reports. Payments to home health agencies in rural areas will increase an estimated 3.4%, while payments to home health agencies in urban areas will increase about 2.5%.
The adjustment is based on the health market basket percentage and the home health market basket index, which is set by CMS to measure inflation in the cost of goods and services typically used in home health care services.
The home health market basket percentage for 2006 is 3.6%. The 2003 Medicare law requires that adjustments to payments for home health care providers for 2005 and 2006 equal 0.8 percentage points less than the home health market basket percentage increase (CQ HealthBeat, 11/2).
CMS' proposed six-percentage-point increase in reimbursement rates to hospitals for the category of drugs known as specified covered outpatient drugs is "excessive" and should be reduced to a three-percentage-point increase, the Government Accountability Office said in an Oct. 31 letter to Senate Finance Committee Chair Chuck Grassley (R-Iowa), House Ways and Means Committee Chair Bill Thomas (R-Calif.) and House Energy and Commerce Committee Chair Joe Barton (R-Texas), CQ HealthBeat reports.
SCODs, which are newly developed drugs used in hospital outpatient departments, are reimbursed separately from the fixed rates Medicare pays hospitals for other outpatient care. GAO said that Medicare's method of using the average sales price to set reimbursement rates is appropriate but noted that the ASP includes prices paid by all purchasers, not just hospitals.
Based on a GAO survey of the actual prices paid to 64 hospitals for SCODs, GAO said an increase of three percentage points is more appropriate. In addition, GAO said proposed reimbursement rates for radiopharmaceuticals are also higher than the price hospitals actually pay to acquire the drugs.
In a response to the GAO report, CMS said it will consider the findings in setting rates for SCODs and radiopharmaceuticals (CQ HealthBeat, 11/2).
Medicare reimbursement rates for physicians will decrease by 4.4% for 2006, while payments for most hospitals will increase by at least 3.7%, the AP/Arizona Daily Star reports. Some physicians have said the cut in reimbursement rates will cause doctors to stop treating Medicare beneficiaries, but CMS officials have said the agency does not have the authority to change the formula used to calculate the reimbursement rate.
A budget reconciliation package approved by the Senate Finance Committee last week would increase physician reimbursements by 1% (AP/Arizona Daily Star, 11/3).
In a letter to McClellan, Medical Group Management Association President and CEO William Jessee urges CMS to postpone implementation of a voluntary program for physicians to self-report data on 36 quality measures, CQ HealthBeat reports. The program, announced last month, is scheduled to begin in January.
Jessee writes that MGMA members feel the program is "likely to be more labor intensive than anticipated by CMS and they would be unlikely to participate." Jessee says participation in the program likely will be even lower if Congress does not approve legislation to stop the scheduled cut in physician reimbursements (CQ HealthBeat, 11/2).
Additional information on the Medicare drug benefit is available online.