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 Senate Finance GOP Wants ‘Super Committee’ To Cut Medicare Medicaid Spending

Senate Finance Committee Republicans have sent a comprehensive list of recommendations to the Joint Select Committee on Deficit Reduction (JSC), the 12-member Super Committee, on how to revamp the nation’s economy top to bottom, including making a major overhaul of the Medicare and Medicaid systems, which they call unsustainable in their current form.

The 21-page document outlines changes to the tax system, Social Security system, and a range of programs in the health care sector, most notably the scrapping of the Affordable Care Act health care reform law. Other proposals urge the Super Committee to address the Medicare eligibility age, the impact of supplemental coverage on overuse of services, a uniform deductible, and fraud and abuse.

For Medicare Part A, which encompasses post-acute care for seniors, the finance panel Republicans said future payment adjustments are legitimate, but must be used to maintain the solvency of the Part A Trust Fund. “Unfortunately, PPACA [reform law] slashed Medicare by over $500 billion and used it mostly to finance new entitlement spending. Nearly every deficit reduction group has included a range of options for adjusting payments to providers,” the document said.

They recommend reducing variations in Medicare spending, noting that spending patterns are uneven and if higher spending areas are brought in line with lower spending areas, Medicare would see a 29 percent decrease in overall outlays.
The group also wants provider payment realignment, eliminating cost shifting from one care setting to another. “The JSC should examine policies that address the providers’ desire to be paid for the appropriate services, regardless of where they are provided. Paying for services in this manner will bend the cost curve downward,” the recommendation said.

Medicaid comes under scrutiny as well, with the Republican proposal pointing to the need for a significant overhaul, calling the program’s ever-expanding costs a major reason for state and federal budget deficits. They want states to have more control in how Medicaid dollars are spent and favor proposals made by Republican governors to use block grants and other mechanisms to cap costs.

“The JSC should also consider proposals to empower states to implement innovative solutions that meet the unique needs of their populations,” the Finance Committee Republicans said. These include modernized eligibility requirements, provider reimbursement favoring quality over quantity, and encouragement of healthy beneficiary behavior to better manage chronic disease.

Separately, a coalition of hospitals and health systems sent a letter to the Super Committee asking that the Medicaid program not be undermined during the deficit reduction talks. They object to one plan being floated to combine the various Medicaid Federal Medical Assistance Percentages (FMAPs) given to states into a singled blended rate for all populations and services, which would be followed by an across-the-board cut to the overall rate.

“While we do not oppose a blended rate in principle, there is no basis in sound public policy for the federal government to arbitrarily reduce its share of Medicaid spending,” the coalition letter said. The proposal would simply shift costs onto states and burden providers and beneficiaries to a greater degree, the coalition said.

The letter is signed by the National Association of Public Hospitals and Health Systems, the American Hospital Association, and a number of other stakeholders.

The JSC has un+til Nov. 23 to make a proposal to Congress on how it plans to cut the deficit by $1.2 trillion.
Dennis Cotter
10:15 AM
October 25, 2011
Improving Our Ability to Assess Health Care Services: A Suggestion for the Joint Select Committee and CBO Consideration The need – This week the Commonwealth Fund released its National Score Card Analysis report, based on 2009 data, that shows a decline in the number of insured. As newer 2010 data are analyzed and reported, changes in the results of Score Card measures will be closely watched. The Affordable Care Act (ACA) was implemented to reverse these trends and provide nearly universal health insurance coverage for Americans. Studies show that health insurance is the gateway to access and use of appropriate health care services. Also this week, Health Affairs held a conference to identify “Saving Money and Improving Patient Care in Medicare: Ideas for the Joint Select Committee. With these events as a backdrop and the need the Joint Select Committee to identify “scoreable” improvements in healthcare delivery, we offer the following: 1. Improvement in access to healthcare services relies on the political will of the U.S. to fully implement the Affordable Care Act (ACA). 2. Healthcare costs are now approaching 17% of GNP (or $2.5 trillion). The affect of the ACA on health care costs is a subject of vitriolic debate. Identifying scoreable improvements are urgently needed. The problem— 3. CBO estimates that as much as 33% of healthcare expenditures are wasted. 4. Chronic medical care is the main driver of our health care system. Eighty percent of health care costs are being spent on those who suffer from chronic conditions and therefore perhaps as much as $660 Billion ($2.5 Trillion x 80% x 33%) is wasted on inappropriate or harmful treatments for chronic conditions. 5. Although access to healthcare remains the focus of the current political debate, understanding “what works in medicine” will also have a significant impact on improving patient outcomes and reducing both overuse of services and healthcare costs. 6. Contributing to the waste are treatments used in mainstream medicine that have not been proven by valid scientific evidence. Robert Smith, Editor BMJ (BMJ, 1991) estimates that only 20% of procedures are supported by valid evidence. In the absence of valid scientific evidence, providers rely on the normal heuristic i.e., treat patients to “normal” values (e.g., physiologic parameters, lab values, etc.). However, this tendency also introduces overuse leading to treatment side effects that cause adverse outcomes. A recent example of the solution, translation of research findings into policy— 7. A case in point is epoetin therapy for chronic dialysis related anemia. Medicare has spent as much as $2.5 billion per year for this drug therapy without evidence of clinical benefit or improvement in quality of life. Based on recent reviews of the existing evidence-based literature, both CMS and FDA made changes in 2011 to their epoetin policies that will result in a 25-50% reduction in use of epoetin in 2011. Elimination of overuse of epoetin also improves both patient survival and reduces adverse events. The opportunity – 8. As shown by the case study of epoetin therapy, the role of comparative effectiveness research is critical to deciding what works, what should be covered, and the value of covered services. As defined by the IOM and others, “Comparative effectiveness research (CER) is the conduct and synthesis of research comparing the benefits and harms of different interventions and strategies to prevent, diagnose, treat and monitor health conditions in ‘real world’ settings. The purpose of this research is to improve health outcomes by developing and disseminating evidence-based information to patients, clinicians, and other decision-makers, responding to their expressed needs, about which interventions are most effective for which patients under specific circumstances.” 9. A new focus of CER is patient-centered CER that involves the patient and other stakeholders in all aspects of the comparative effectiveness research from which questions to prioritize, which outcomes to examine, which populations to study, which interventions to include (e.g., medications, procedures, medical and assistive devices and technologies, diagnostic testing, behavioral change, and delivery system strategies), and finally which datasets to use and which comparative methods are most appropriate. 10. Randomized controlled trials are important, but only provide insight into clinical effectiveness of a small group of patients in the “ideal setting,” are very costly to conduct, and are very time consuming. Pragmatic clinical studies rely on existing “real-world” data, are comparatively much less costly, can be conducted in a short period of time, and can address many policy questions regarding coverage and reimbursement of existing and new services. Real-world data emanates from electronic patient records, patients registries, claims data etc.. 11. Expanded Medicare claims data containing treatment dose and physiologic response was the source used for three recent pragmatic clinical studies whose results catalyzed Congress, CMS, and FDA to act to further restrict overuse of epoetin therapy. Specifically, pragmatic clinical studies, using causal methodologic techniques led to findings that influenced Congressional decisions to implement the new ESRD Prospective Payment System (PPS) initiated in January 2011. As a result, preliminary data suggest that epoetin use has dramatically declined. How to score this opportunity – 12. Eighty percent of health care costs are attributable to treatment of chronic conditions. Imposition of a requirement to include treatment data (e.g. Medicare’s requirement to include both treatment dose and physiologic response as demonstrated in our epoetin therapy example) on interventions used to other chronic disease conditions, will allow researchers to use expanded claims data to conduct pragmatic clinical studies to assess the value of such treatments. In the epoetin case, researchers were able to identify overuse (~ 50%) of the drug as well as an increased mortality risk of 32% among diabetic vs. nondiabetic dialysis patients. These CER results supported recent CMS and FDA changes in epoetin policy. Physicians and other providers have responded to these changes by reducing: epoetin doses, the number of patients exposed to epoetin, and the number of additional hospitalizations and other services need to treat the side effects from epoetin overuse. Table 1 below suggests criteria that could be used to identify overuse of drugs. Table 1. Criteria to identify overuse of drug interventions for chronic conditions: - Administering initial doses above the FDA recommended dosage range - Administering maintenance doses above the FDA recommended dosage range - Continuing to administer doses to hyporesponsive patients after the point at which FDA recommends stop using the drug - Titrating doses outside of the FDA recommended dosage range - Treating patients above the FDA recommended treatment target (physiologic response) range - Treating patients with complications/comorbidities, conditions that were used as exclusion criteria in FDA Phase III pivotal studies a/o approved labeling The result— 13. As evidence-based medicine advances the understanding “what works in medicine,” these studies will lead to more prudent use of other costly health care services, shown to be clinically effective, and ultimately lead to better healthcare for all Americans. Submit on 10/20/11 by: Dennis J. Cotter President, MTPPI Bethesda, Maryland MTPPI ( is a 501(c)3 non-profit institute, established in 1986, that studies the causal relationship between treatment and clinical outcomes for chronic conditions.
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