Medicare Watch

President Obama Releases Fiscal Year 2013 Budget, Including Changes to Medicare

This week, President Obama released the administration’s proposed budget for fiscal year 2013. The budget contains few surprises pertaining to Medicare and Medicaid, as it incorporates the president’s deficit reduction plan released in September of last year. The majority of savings from Medicare will come as a result of changes in provider payments, strengthening of programs that combat fraud, waste and abuse in Medicare, and reforms that lower the cost of prescription drugs for both the Medicare program and beneficiaries. Under one provision modeled after Medicaid policies, drug manufacturers would pay rebates to the Medicare program for drugs provided to Medicare beneficiaries who qualify for the Part D Low-Income Subsidy (LIS) benefit, also known as Extra Help. This proposal, which revives a policy that was in place before the Medicare prescription drug benefit was enacted, would save an estimated $155 billion over ten years. The budget also includes provisions that would allow generic drugs, which are less costly for consumers, to enter the market more quickly. This proposal would save an estimated $8.6 billion.

However, the budget also contains problematic provisions that would save the federal government money only by shifting costs to Medicare beneficiaries. Such provisions include a premium surcharge on those Medicare supplemental policies, also known as Medigaps, that provide the most comprehensive coverage of Medicare out-of-pocket costs. In addition, the proposed budget increases Medicare Part B deductibles and creates new co-payments for Medicare home health services that are currently available with no cost-sharing. Lastly, the budget would further means-test Medicare Part B and Part D premiums, and require over time that one-in-four Medicare beneficiaries pay an increased, income-related premium. Such proposals do not address growing costs in the health care sector overall, the root cause of increasing costs in Medicare—a health insurance program that grows at a slower rate per capita than private insurance.

The president’s budget does include provisions to increase revenue by closing certain corporate loopholes and allowing tax cuts for the wealthiest Americans to expire. These increased revenues help to offset the threat of higher cuts to programs such as Medicare and Medicaid.

Read Medicare Rights Center President Joe Baker’s statement on the fiscal year 2013 budget.

Read the Department of Health and Human Services’ fiscal year 2013 Budget in Brief (a summary of the Medicare provisions begins on p. 50).

Agreement Reached to Prevent Medicare Doctor Payment Cuts

Lawmakers have reached an agreement that will prevent a pending 27.4 percent cut to Medicare physician payments, which would otherwise take effect on March 1. As part of the agreement, current Medicare physician payment rates will remain intact through the end of 2012. At that time, Congress will need to take further action to prevent Medicare physician reimbursement rate reductions from taking effect on January 1, 2013. In order to offset the cost of the cut through the end of this year, Congress enacted reforms that reduce the amount of “bad debt” payments Medicare makes to help hospitals and doctors cover unpaid bills from patients. The final agreement also cuts the Prevention Fund, an important component of the Affordable Care Act (ACA) that provides increased funding to make investments in preventive care.

In addition, the final agreement includes extensions of several important Medicare programs, including the Qualified Individual (QI) benefit and the Medicare therapy caps exceptions process. QI is a federal block grant that is provided to states to help individuals with limited incomes pay their monthly Medicare Part B premiums. The Medicare therapy caps exceptions process allows individuals to receive speech, physical and occupational therapy beyond standard Medicare limits, when such services are medically necessary. However, the agreement includes slight modifications to the existing exceptions process that will require more stringent reviews of exceptions requests.

According to reports, a vote on the agreement can take place as early as Friday. The bill also contains provisions that would extend both a temporary Social Security payroll tax cut and unemployment insurance benefits due to expire at the end of the month.

Read Medicare Rights Center President Joe Baker’s statement on the congressional conference agreement to prevent Medicare physician payment cuts.

Read Kaiser Health News’ round-up of articles on the agreement.

 

Medicare Reminder

If you have Original Medicare, Medicare Part B will pay 80 percent of its approved amount for your initial visit to a mental health professional to determine your diagnosis. For appointments after your initial visit, Medicare will pay 60 percent of its approved amount. You or your supplemental insurer will be responsible for the remainder of the bill.

Medicare covers individual and group therapy, occupational therapy, substance abuse treatment, laboratory tests, prescription drugs that must be administered by a doctor, and other outpatient mental health services.

You can get mental health services in an outpatient hospital program, a doctor’s or therapist’s office or a clinic. Medicare will only pay for services provided by non-medical doctors (such as psychologists and clinical social workers) if they are Medicare-certified and take assignment, meaning they accept Medicare’s approved amount as payment infull. Medicare will also pay for the services of medical doctors (such as psychiatrists) who do not take assignment, but these doctors can charge you up to 15 percent above Medicare's approved amount, in addition to the coinsurance.

Learn more about Medicare coverage of outpatient mental health services at www.medicareinteractive.org.

Spotlight

The Affordable Care Act (ACA) provided approximately 32.5 million people with Medicare with at least one free preventive benefit in 2011, according to a report released this week by the Department of Health and Human Services. Last year, an estimated 54 million Americans also accessed free preventive benefits through their private insurance plans, amounting to about 86 million Americans total who have taken advantage of prevention coverage at no cost-sharing as a direct result of the ACA.

Read the press release.