| Home | Providers expected to feel sting of Medicare cutsposted 5-9-97 Healthcare providers will bear the bulk of Medicare cuts currently being considered by Congress during balanced-budget talks. “Most of the cuts will come out of the hides of providers,” said Stephanie Reed, assistant director of federal government relations at the American Nurses Association in Washington. But exactly which providers will be affected and how the cuts will be enacted remain to be seen, along with many other details associated with the federal budget. Reed said Congressional Republican leaders and President Clinton developed a blueprint to balance the federal budget in five years, but it is up to Congress “to enact laws to make it happen.” If a balanced budget is indeed reached by 2002, it will be the first since President Lyndon Johnson was in the White House. Details of the proposed budget are still being negotiated, but Medicare's projected spending is expected to be cut by $115 billion over the next five years, with healthcare groups bearing almost $100 billion of the cuts. Most of the provider community is resigned to Medicare reimbursement rates' being cut and are now focusing how the cuts are made. Spending on home health services are almost certain to be reduced. Government spending on these services has risen from $3.3 billion in 1990 to $16.7 billion in 1996. Under consideration is a plan to pay agencies a fixed amount for all the visits a patient receives in a given period. If services are provided for less than that amount, the agency could keep some of the savings. Hospital and insurance industry representatives are squaring off. Hospital representatives are lobbying for legislation to make it easier for hospitals and physicians to create provider networks to compete with insurance companies. The insurance industry opposes giving provider networks these regulatory breaks. Republican legislators may reintroduce medical savings accounts (MSAs) as an option for Medicare beneficiaries. The accounts are expected to cover routine health expenses; catastrophic insurance policies cover more expensive health procedures. The Clinton administration opposes MSAs. Medicare beneficiaries are the winner under the current budget plan. Seniors' premiums will increase slightly – by $4.50 a month by 2002 – and they will be eligible for more prevention services, such as colon cancer screening. During negotiations with Congressional Republicans, however, Clinton dropped his plan for Medicare to pay for 32 hours of respite care for families of beneficiaries with Alzheimer's disease. Projected Medicaid spending is slated for cuts of between $22 billion and $24 billion over the next five years. Medicaid' s disproportionate share payments –the payment made to hospitals, mostly in the inner city, that care for a disproportionately high number of poor people – may be cut. Related Site | |