Changes to Medicare are Already Here!
Polls show that most Americans, especially seniors, are against any changes in Medicare. Above all, people don’t want their benefits reduced. What they don’t seem to realize is that legislation has already been passed that will, in fact, reduce their benefits. The Patient Protection and Affordable Care Act (PPACA) passed last year will force major changes to Medicare. Indeed, in order to pay for the bill’s expansion of health care entitlements, a whopping half a trillion dollars must be cut from Medicare. The provisions needed to do this are buried in the 2,700 page bill.
The scariest one is the Independent Payment Advisory Board (IPAB) found in section 3403 of the PPACA. It’s a 15 member panel appointed by the president and commissioned to work full time to keep Medicare spending under a certain level. However, its approach is largely limited to reducing reimbursements to medical service providers starting with physicians and later extending the reductions to hospitals and other facilities.
Every year, if Medicare costs are too high, the panel will submit a reduction plan. Congress has to agree or pass by a challenging 3/4 majority a plan of their own that accomplishes the same objective. If this can’t be done within a certain period, the reductions proposed by IPAB automatically take place without the chance of even a President’s veto. These conditions make it nearly impossible to challenge any IPAB proposal, effectively making IPAB an autonomous un-elected legislative body and stripping Congress of its authority over Medicare expenses
Richard Foster, Medicare’s respected actuary, has testified that reducing physician payments to the extent proposed would force doctors to do more with less money or quit Medicare practice altogether thereby substantially reducing seniors’ access to care. He estimates that hospitals would also become unprofitable further endangering the health-care-scene for seniors.
IPAB is a cowardly way to cut the Medicare budget. A group of largely anonymous bureaucrats unaccountable to no one will do the dirty work allowing legislators to escape blame for reducing seniors’ health benefits.
It doesn’t stop there. Another way the PPACA plans to save Medicare dollars and reduce benefits is by having members obtain health care through Accountable Care Organizations (ACOs) instead of independent doctors of their own choosing.
ACOs are groups of medical personnel working together with various medical facilities. (hospitals, clinics, labs) that, under rules developed by Medicare, will provide integrated care for patients. Because all the medical services provided in the ACO share the same patient information, fewer mistakes and better diagnosis are made. Physicians working for the ACO are salaried and their time is managed by the ACO so there is no incentive to add extra visits, tests, or procedures as there is in the usual, fee-for-service system. To control costs, Medicare will collect patient data to evaluate patient treatment and reward what they see as good, cost effective results.
The program will begin in 2012. As ACOs become Medicare-certified, seniors will be assigned to one in their area. Incentives will be offered to encourage seniors to join but, initially, it won’t be mandatory.
It sounds like a good idea. Shared patient information, integrated care, lower cost, an end to unnecessary services. What’s not to like?? Well, for starters your ACO primary doctor will recommend the ACO heart doctor when one is needed, not the acclaimed but more expensive independent heart specialist. Expensive treatments will count against the total amount spend on a patient. As a result, your ACO doctor will think twice before ordering one for you. In fact, the latest technologies and procedures, in general, will not be considered unless they’re on a government approved list. (This is also covered in another PPACA provision, the Patient-Centered Outcomes Research Institute (PCORI) which will control what treatments all doctors can use.)
Another benefit-limiting provision of the PPACA is called value based purchasing which will effect all physicians, ACO-based or not. Medicare will evaluate physicians’ costs in treating patients compared to their peers. To keep from being penalized, doctors will soon avoid treating patients requiring more expensive treatments or avoid more costly but effective treatments in general.
In an another example of government micromanaging medical treatment, the PPACA is paying particular attention to what they see as the overuse of imaging. All doctors will be allowed only a limited number of advanced diagnostic imaging, CT/MRI scans , on an individual regardless of the severity of injuries or disease or face more penalties.
These and other PPACA changes to Medicare are being readied for roll-out. People’s fears about any future legislation that will reduce their Medicare benefits are misplaced. It’s what’s in a law that has already passed that should be looked into. Perhaps as people become more aware of what’s in store for them under the PPACA, they may be more open to consider more seriously the Medicare reform options being discussed today.