Nurseweek/healthweek | Bill tightening Medicare spending scheduled for vote in House committee this week

Bill tightening Medicare spending scheduled for vote in House

posted 6-9-97

The House Ways and Means Committee is preparing to vote on a bill this week that reduces Medicare spending and paves the way for the balanced budget bill.

The bill would limit the growth of Medicare spending over the next five years by $115 billion, with most of the savings coming from payment reductions to hospitals, medical equipment suppliers, and other providers.

Under the bipartisan plan currently in Congress, Medicare beneficiaries would pay slightly higher monthly premiums. Providers are suggesting, however, that if their reimbursement rates are lowered, they will increase the beneficiaries’ out-of-pocket expenses or reduce services.

On June 4, the Ways and Means Health Subcommittee passed the bill by a vote of 13-0. Also included in the bill was a compromise between the Clinton administration and Congressional Republicans establishing a demonstration project for medical savings accounts. The project would allow the 500,000 Medicare beneficiaries to take their benefits as a cash voucher and use some of the money to purchase catastrophic health insurance. The seniors would deposit the remainder of their money in tax-exempt savings accounts and use it to pay other medical expenses.

The bill would also expand seniors’ Medicare managed care options, including preferred-provider organizations (PPOs) or provider-sponsored organizations (PSOs). A PPO is a network of physicians and hospitals that contract with a payer to provide care at a lower cost than traditional insurance. PPO members’ benefits are better when they use the PPO’s network. Conversely, members pay higher out-of-pocket costs when they receive care outside the PPO network. In PSOs, groups of physicians and hospitals would be able to contract directly with Medicare.