Minn. health providers worry over possible Medicare cuts

Some Minnesota doctors and hospitals are worried they could be targeted for Medicare cuts.

A House Committee in Washington takes testimony Wednesday about a controversial board charged with reining in the ballooning cost of Medicare.

The Independent Payment Advisory Board created by the Federal Patient Protection and Affordable Care Act is a commission of presidential appointees tasked with reducing the rate rising costs in Medicare.

In a report, the Kaiser Family Foundation said that "Prior to 2020, the growth target is based on a measure of inflation, and in subsequent years, it is based on the per capita growth in the economy (gross domestic product plus one percentage point)."

Up to 15 independent experts, to be confirmed by the U.S. Senate, will make recommendations to Congress on how and where to cut and improve Medicare. The goal is to take cxongressional politics out of Medicare policy-making.

The board will have clout. Health care reform includes tough limits on what Congress can do to change the board's recommendations or block them from taking effect.

When the proposal for the advisory board first surfaced during the federal health care law, a number of the Minnesota's doctors were open to the concept, said Dave Renner of the Minnesota Medical Association.

"There were some of our own physician members who thought maybe there's some merit to this idea of depoliticizing decisions that are made on how we fund Medicare," Renner said.

Welcome changed to worry when details of how the board would work were revealed, Renner said. The board couldn't touch most hospital payments for several years, or scale back Medicare coverage. However, payments to doctors got no such protections.

"The concern is that this is going to be focusing on about the only big area of spending and that's physician payments," Renner said.

Renner added that tying the activities of the advisory board to the existing Medicare physician formula could result in cuts of 30 percent to physician payments.

Now the Minnesota Medical Association wants Congress to repeal IPAB as a result.

U.S. Rep. Betty McCollum, D-Minn., said IPAB is only one tool in the federal government's kit to determine why costs are going up and to improve quality.

"It's not the charge of IPAB to do that kind of going after physicians," McCollum said. "That's not how we are going to see our cost savings. Our cost savings is going to be in efficiencies and delivering services to seniors that are effective."

Supporters say identifying and preventing the cause of hospital re-admissions — which jack up costs — is one example of how the legislation could potentially reduce costs.

The head of the Minnesota Hospital Association, which represents most of the hospitals in the state, also has concerns about the new board. Lawrence Massa said even though most of the larger hospitals are exempt from the board's purview for several years, the smaller critical access hospitals are not. These are hospitals with fewer than 25 beds, and usually in rural areas where access to care would be jeopardized if no hospital existed.

Independent congressional agency MEDPAC said Medicare pays these hospitals 101 percent of their allowable costs for most services instead of basing payment on the type of service or the number of services they provide.

Massa says critical access hospitals should be exempt from the board's authority.

"We have the third-largest number of critical access hospitals in the country. We have a very large state with some fairly remote areas and critical access has really stabilized that status; it's stabilized the financial environment in many of those communities," Massa said. "So we're very protective of that."

The IPAB board has become a lightning rod for controversy on many fronts. Tricia Neuman, director of Medicare policy at the Kaiser foundation said there are questions whether IPAB significantly erodes Congress' role in some respects.

The board is required to make recommendations to Congress beginning in January of 2014, Neuman said. Congress would have only two-and-a-half months to agree on any changes — changes which require a two-thirds majority in both houses. Neuman said if Congress doesn't act in those two-and-a-half months, the secretary of Health and Human Services is required to implement the Board's recommendations by the following August.

"It's not a lot of time to get a set of recommendations and to review them and to revise them before they're implemented. It's a pretty rapid schedule," Neuman said. "So the concern is that it's easy to see how that may not happen and how Congress may not have ample time to deliberate."

A House Health Subcommittee is scheduled to take up the issue of IPAB Wednesday morning in Washington at a hearing entitled, "IPAB: The Controversial Consequences for Medicare and Seniors."