Providers React to Congressional Approval of Medicare Givebacks Bill
Although Congress passed more than $30 billion in Medicare "givebacks" on Dec. 15, officials at Michigan hospitals and nursing homes called the package "little more than a Band-Aid on a gaping wound" and warned that state residents will not receive additional services, the Ann Arbor News reports. "It's a day late and a dollar short," Michael Boff, president of Trillium Hospital in Albion, Mich., said, adding, "We can look forward to more deterioration and erosion in health care services in our communities." Boff and other health care experts argue that the Medicare "giveback" bill, which takes effect immediately, will not "reverse several years of insufficient federal funding" that has resulted in fewer services and some nursing home closures. Andrew Hogan, a health economist at Michigan State University, said the budget cuts came at "just the wrong moment," prompting staffing shortages at nursing homes and home health care agencies. "What happened is people started leaving home care and you couldn't recruit anybody to get back in," he said, adding, "Agencies didn't have any choice but to close. Even with new money now, those agencies aren't going to be helped. They don't exist anymore." During the past two years, dozens of Michigan home health agencies and 10 state nursing homes closed their doors because of low Medicare reimbursement rates, and hospitals across the state ended programs, including obstetrics departments and intensive care units.
HMOs and Rx Drugs
Meanwhile, Michigan managed care companies have faced "soaring costs" and lower reimbursement rates, prompting many to exit the Medicare market. "I don't think people realized in the beginning what the full ramifications [of the 1997 Balanced Budget Act cuts] would be," Gary Ellens, a spokesperson for the Michigan Association of Homes and Services for the Aging, said. Sen.-elect Debbie Stabenow (D-Mich.) said, "We've already lost a number of home health care agencies and nursing homes. We (needed) to do something to ensure access and affordability for our senior citizens." Still, health care providers fear that the future holds "something far worse" -- a Medicare prescription drug benefit -- which could cost "hundreds of billions of dollars" annually. While lawmakers may fund the program with the federal budget surplus, many worry that the government cannot "sustain" funding in the long term (Kellogg, Ann Arbor News, 12/18).
Same Story, Different State
Meanwhile, in Massachusetts, health care providers and insurers will receive $450 million in Medicare "givebacks," but Bay State hospital and HMO leaders warned that the funds will not "cure what ails them," the Boston Herald reports. The funds will help maintain programs, avoid layoffs and raise salaries to reduce nursing, technician and pharmacist shortages, but without additional money from state and private payers, hospital officials warn that their financial "struggles" will continue. "It means we have a little bit better breathing space than we had before," Dr. Samuel Thier, CEO of Partners Health Care System, said, adding, "But it's important to realize they're not giving us more, they're just cutting us less." But according to Dr. Michael Collins, CEO of Caritas Christi Health Care System, "It's a recognition that payments must approximate the cost of care, and that's a principal we need all payers to recognize." Sen. Ted Kennedy (D-Mass.) said, "This legislation provides 'financial CPR' for hospitals, home health agencies, nursing homes and other important Medicare providers around the country," but added that "it doesn't go far enough" and "more should be done next year."
HMOs Get a Cut
In addition, Massachusetts HMOs will receive about $150 million, which could spur lower premiums next year for seniors enrolled in Blue Cross and Blue Shield of Massachusetts' Medicare managed care plan. Next year, seniors face "sharp" increases in monthly payments, which will jump from $25 a month this year to $85 to $105 in 2001. Tufts Health Plan and Harvard Pilgrim Health Care Inc. would likely use the funds to boost payments for doctors, with many physicians refusing to provide care to Medicare HMO members due to low reimbursement rates. "The last few years have been difficult for (Medicare HMO plans), for the members and the providers," Harvard Pilgrim spokesperson Sharon Torgerson said, adding, "The reimbursement rates have been increasing at a rate of only 2% a year while medical inflation has averaged between 7% and 9%" (Heldt Powell, Boston Herald, 12/17).