Sunday, July 06, 2008

Weekend update / Miscellany

  • I hope that everyone is enjoying the 4th of July holiday weekend. OPM announced last week that on June 26 the agency established a working group with OPM's Office of the Inspector General and develop steps to strengthen the controls and oversight of the FEHB Program.
  • The New York Times reports today on the cost efficacy issues raised by use of Genetech's blockbuster specialty drug Avastin.
  • Congress returns from its break early this week. According to the Washington Post,

    Senate leaders plan to reprise a bill preventing a 10.6 percent cut in Medicare payments to doctors. It passed the House overwhelmingly in defiance of Bush's threat to veto it, but fell just one vote short of the 60 it needed to advance in the Senate.

    Bush and Senate Republicans do not like offsetting cuts to insurance companies that use Medicare money to offer private health care coverage to about 20 percent of older people. The lower fees to doctors went into effect Tuesday. Medicare officials are holding off processing new claims, hoping Congress will act within the next couple of weeks to restore the higher payments.

    This bill also would delay Medicare's durable medical equipment competitive bidding process for 18 months, even though the process kicked off last week. The Chicago Tribune explains that

    Five years ago, Congress decreed that Medicare should scrap its fee schedule and create an open, competitive bidding program for medical equipment such as oxygen tanks, wheelchairs and hospital beds. The reason is simple: When the government sets the rates for renting or buying that equipment, the prices soar—$4,023 for a powered wheelchair that carries an online price of $2,174, or $1,825 for a hospital bed that can be found on the Web for $754.

    On Tuesday, Medicare began a 10-city pilot project for medical equipment billing. That's supposed to go nationwide in 2010. Based on preliminary bids, Medicare estimates it will save 26 percent over current costs. On some items it will save much more than that.

    But the trade association for medical equipment suppliers and other lobbyists have worked hard to derail this bidding program. The bill that would rescind the doctor's pay cut would also delay the equipment bidding program for 18 months.

    The bill would cut payments to equipment suppliers by 9.5 percent—but that's far less than Medicare anticipates it would save with honest market competition.

    The lobbyists argue that the bidding process was flawed and competition will create some job dislocations. Some companies won't survive.

    That's probably true: competition creates winners and losers. But Medicare is not going to get a handle on its rising costs by rejiggering its government-controlled pricing. As long as the anti-competitive provisions are in the bill, it will be bad for patients and taxpayers.

    Meanwhile, also on the Medicare front, CMS issued proposed rules last week on proposed 2009 changes to Medicare's reimbursement methodologies for outpatient hospital care and physician care. While the proposed reimbursement cut to physicians would be overridden by the Medicare fix bill, the proposed rule's changes to the Physician Quality Reporting Initiative (PQRI) are likely to be implemented.

    Finally, last month, the Medicare Payment Advisory Commission (MedPAC)
    released its June 2008 Report to the Congress: Reforming the Delivery System, which included support for the medical home initiative and bundling unrelated physician payments for certain chronic illnesses such as congestive heart failure.

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