CBS News explains that the new debt ceiling law, among other things,
Creates a 12-person House and Senate special committee to identify further spending cuts. The committee must complete its work by Thanksgiving - November 23 - and Congress must hold an up or down vote on the committee recommendations by December 23. The committee could overhaul the tax code or find savings in benefit programs like Medicaid, Medicare or Social Security. Congress could not modify the committee's recommendation.
Should the special committee deadlock or should Congress reject the committee's recommendations, then automatic across the board spending cuts of at least $1.2 trillion would go into effect.
A National Underwriter article explains how this process may affect health insurers.
The process may have a direct impact on the FEHB Program. The President's deficit reduction commission proposed last year that a premium support approach to the government contribution be tested in the FEHBP. Under premium support, the entire government contribution would be made available to pay the plan premium but the annual increases would be tied to a standard, such as the CPI-U. In other words, an employee or annuitant could have no employee contribution for a low cost plan. Currently, the law, 5 U.S.C. Sec. 8906, provides for a minimum 25% employee contribution. This Kaiser Health News article reviews all of that commision's recommendations.
Health care providers are concerned about the new law. Modern Healthcare notes that
some physician advocates warned about the complicated timing of the work of the deficit reduction panel, which will have to offer $1.5 trillion in cuts by Nov. 23 and secure congressional passage by Dec. 23. That is the same time frame in which Congress will need to find billions of dollars to pay for another delay of the 29.5% cut in Medicare physician reimbursements scheduled for the beginning of 2012.Speaking of Medicare, the Centers for Medicare and Medicaid Services announced today the Program's inpatient hospital care reimbursement policies for the federal fiscal year that begins October 1, 2012
CMS projects that total Medicare operating payments to acute care hospitals for inpatient services occurring in FY 2012 will increase by $1.13 billion, or 1.1 percent, in FY 2012 compared with FY 2011, due to a 1.0 percent increase in payment rates together with other policies adopted in the final rule.
To provide hospitals with an incentive to reduce preventable hospital readmissions and improve care coordination, the Affordable Care Act requires CMS to implement a Hospital Readmissions Reduction Program that will reduce payments beginning in FY 2013 – for discharges on or after Oct. 1, 2012 ‑ to certain hospitals that have excess readmissions for certain selected conditions. Today’s final rule finalizes readmissions measures for three conditions -- acute myocardial infarction (or heart attack), heart failure, and pneumonia – as well as the methodology that will be used to calculate excess readmission rates for these conditions.
The final rule also adopts a Medicare spending per beneficiary measure for both the Hospital IQR Program and the new Hospital Inpatient Value-Based Purchasing (VBP) program required by the Affordable Care Act. The new measure will assess Part A and Part B beneficiary spending during a period of time that spans from three days prior to a hospital admission through 30 days after the patient is discharged. The goal is to encourage hospitals to provide high quality care to Medicare beneficiaries at a lower cost and to promote greater efficiencies across care settings and throughout the entire U.S. health care system.