KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Medicare Payment Rates Cause Concern

Legislation in Congress would boost Medicare payment rates for some doctors who claim they are are routinely underpaid for services in California. Meanwhile hearings in South Dakota focus on Medicare reimbursement issues in rural areas.

The San Jose Mercury News reports that "Rep. Sam Farr, D-Carmel, is expected to introduce a bill today that would increase Medicare funding for the Golden State and resolve long-standing inequities in how the money is allocated. A similar bill, put forth by Sen. Dianne Feinstein, D-Calif., is anticipated in the Senate."

The paper reports that "similar proposals to amend reimbursement rates have been unsuccessful in years past" but supporters are optimistic that the time is now right. It notes that "Medicare reimbursement to California doctors is based on a decades-old formula that handicaps physicians in areas where costs have grown disproportionately. For example, doctors in once low-cost Santa Cruz County currently receive 15 percent less reimbursement than their peers in neighboring Santa Clara County, even though today's costs are comparable. The disparity has squeezed many doctors in the region and, as highlighted in several stories in the Sentinel, has prompted some to discontinue services for Medicare patients."

"Farr's bill, and the companion Senate piece, would change how geographic areas are defined for purposes of calculating cost-of-living differentials.... The bill addresses concerns about enriching some counties at the expense of others by calling for a $50 million bump in the state's total endowment. The terms of the legislation ensure that no county would experience a drop in its current reimbursement rate (Alexander, 6/11).

The Rapid City Journal reports that Dr. Tom Dean, a member of the Medicare Payment Advisory Commission, called the "current state of rural health care in the United States a crisis" at hearings in South Dakota." A member of the national committee that advises Congress on Medicare reimbursement payments, Dean "joined nine other South Dakota health care professionals who outlined the issues contributing to the growing health care crisis in rural South Dakota. Speakers blamed the state's rural geography, its aging population, home health care needs, unfair Medicare reimbursement payments and an urgent shortage of primary care physicians."

Speakers also talked about the need to train more primary care providers to practice in rural areas and the need for increased Medicare reimbursement rates. Dean said "setting fair reimbursement rates is an ongoing challenge. There is a huge difference in reimbursement rates between regions of the country... MedPAC must analyze reimbursement rates and decipher whether funds are fair and being used wisely." Dean noted that "about 18 percent of hospital Medicare patients are re-admitted with the same diagnosis within 30 days of their discharge. Two-thirds of those could be avoided with better post-hospitalization care. A stronger primary care system will improve those numbers by providing better continuity in care, Dean said. Bundling reimbursement payments and attaching outcome expectations also may help" (Rick, 6/10).

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