Newspapers Examine Medicare Cost Issues
Two newspapers on Tuesday examined cost issues related to Medicare. Summaries appear below.
Los Angeles Times: The Times examined how as many as 10,000 Medicare beneficiaries nationwide are having difficulty obtaining intravenous immune globulin treatments after CMS reduced reimbursement rates for doctors and hospitals that provide the service. The situation illustrates "how hard [it] is" to reduce Medicare costs without hurting beneficiaries and potentially raising health care costs in other areas, the Times reports. IVIG is used to treat a number of conditions that affect the immune system and nerves. Until last year, Medicare reimbursed providers using a formula based on the equivalent of list prices for the treatment. However, in an effort to cut costs, CMS changed to a new payment formula based on an average of actual sale prices. Providers now say the reimbursements do not cover the cost of providing the treatments, and many have dropped the service. In response to a letter from the government's Advisory Committee on Blood Safety and Availability warning that many beneficiaries were having trouble obtaining services, CMS has approved a new administrative fee for doctors and hospitals providing IVIG treatment, but the providers say it still does not cover costs. As a result, some patients are reducing the number of treatments they receive or are turning to less-effective, alternative treatments. For some, their conditions have worsened, possibly raising costs for Medicare, according to the Times. HHS Secretary Mike Leavitt said at a recent congressional hearing that officials "understand" the problem and are "going to resolve it" (Alonso-Zaldivar, Los Angeles Times, 2/28).
- Wall Street Journal: The Journal examined an effort by the Bush administration to allow Medicare beneficiaries to take ownership of certain medical supplies after renting them for a specified period of time. According to the Journal, Congress this month approved a provision in the fiscal year 2006 federal budget mandating a "rent-to-own" rule under which Medicare home care beneficiaries can "take title" to their rented hospital beds after 13 months. The change is intended to reduce Medicare costs by eliminating rental payments. The Bush administration hopes to apply a similar rule to oxygen equipment. The change would allow Medicare in effect to "buy" the equipment for beneficiaries, who would be expected to "bargain for services" such as oxygen supplies and maintenance, the Journal reports. The change could save billions of dollars on the one million beneficiaries for whom Medicare currently provides oxygen therapy services, the Bush administration says. "Republican-friendly medical-equipment and homecare suppliers" that rent equipment to Medicare are "angered" by the proposal and say the Bush administration is placing too much faith in the ability of the health care system to adhere to a free-market ideology and the ability of frail beneficiaries to bargain for their care, the Journal reports (Rogers, Wall Street Journal, 2/28).