President, GOP Leaders Begin Talks To Avoid Medicare Payment Cuts
On Wednesday, President Obama began negotiations with congressional Republican leaders to avoid looming mandated spending cuts under sequestration, which include cuts to Medicare provider payments, the Washington Post reports (Goldfarb/Montgomery, Washington Post, 11/7).
The sequester involves about $1 trillion in across-the-board cuts, including a 2% reduction to all Medicare reimbursement rates in 2013. Hospital, nurse and physician groups have warned that the cuts could result in as many as 500,000 jobs lost in the health care sector and missed opportunities for new hires in 2013 (California Healthline, 11/7).
In a conference call with House Speaker John Boehner (R-Ohio) and other top lawmakers, Obama urged them to set aside partisan differences to develop a solution for the sequester. Following the conference call, Boehner said Republicans are willing to accept a budget deal that would raise federal revenues as long as the administration does not "continue to duck the matter of entitlements" (Washington Post, 11/7). He noted that a budget deal would have to overhaul both the tax code and entitlement programs, including Medicare and Medicaid (Calmes/Baker, New York Times, 11/7).
Senate Majority Leader Harry Reid (D-Nev.) on Wednesday suggested he was open to a bipartisan deal. He said, "It is better to dance than to fight. ... It is better to work together."
Despite the conciliatory tone taken by both parties, there still is a "huge gap" between Democrats and Republicans on a potential deal, according to the Post.
The Obama administration on Wednesday said that Obama's re-election presented a mandate to pursue tax increases for high-income U.S. residents, to which the GOP remains opposed. In addition, the Post reports that there are "divisions" between the two parties on how best to reform entitlement programs (Washington Post, 11/7).
Negotiations Could Affect ACA Provisions
In related news, some health policy analysts have said that pressure to reduce the federal deficit could leave some of the Affordable Care Act's provisions open to negotiation, Kaiser Health News reports.
Among the provisions that analysts say could be reconsidered as part of a larger deal to reduce federal spending is:
- A 2.3% tax on the sale of medical devices;
- A provision that prohibits insurers from charging elderly U.S. residents more than three times the amount paid by a younger individuals for a health policy;
- The Medicaid expansion;
- The creation of the Independent Payment Advisory Board; and
- Federal subsidies to help low-income individuals purchase health insurance.
However, Republicans likely will not be successful in altering the law, according to Dan Mendelson, CEO of Avalere Health and former adviser to President Clinton. He said the GOP could risk "political backlash" from consumers who have waited for the major provisions to take effect (Carey, Kaiser Health News, 11/7).
AMA Warns About Effects of SGR Cuts
Meanwhile, the American Medical Association on Wednesday warned the Obama administration about the looming 27% reduction to Medicare physician reimbursement rates under the sustainable growth rate formula, The Hill's "Healthwatch" reports. The current short-term fix to delay the cuts expires on Dec. 31.
AMA promised to work with lawmakers and the Obama administration to avoid the cuts.
AMA president Jeremy Lazarus called for a plan that "will move Medicare away from this broken physician payment system and toward a Medicare program that rewards physicians for providing well-coordinated, efficient, high-quality patient care while reducing health care costs" (Viebeck, "Healthwatch," The Hill, 11/7).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.