Medicare roundup: Payment cuts irk healthcare industry; officials mull new prostate-cancer treatment

McKnight's: "Doctors across the United States are taking a wait-and-see approach while Congress decides whether or not to allow a scheduled 23% cut in Medicare reimbursement rates to take effect on Dec. 1." Action is expected in the congressional lame duck session, which began this week. "The American Medical Association and the U.S. Health and Human Services Department support a 13-month reprieve from implementing the cuts while Congress finds a more permanent solution" (11/16).

Kaiser Health News: For more on lawmakers' debate on "the impending cut in Medicare physician payments," the "possible repeal of a provision requiring individuals to file a 1099 form with the Internal Revenue Service for the purchase of goods and services of $600 or more," and other health-related issues; listen to this conversation (or read the transcript) with KHN's Mary Agnes Carey, NPR's Julie Rovner, and the Kaiser Family Foundation's Jackie Judd (11/15).

Meanwhile, reimbursement cuts in the federal health-care law could "pose an enormous credit risk for some health-care companies, according to the credit-rating agency Moody's Investors Service, the Wall Street Journal Health Blog. "Medicare pays more than $300 billion to providers annually," and around "70% of corporate health providers rely on Medicare and Medicaid for more than one-third of their revenue." Home health, oxygen and durable equipment companies, and hospice care, nursing homes and specialty hospitals" are among the industries expected "to face the sharpest cuts in government money." The agency also predicts "consolidation in health industries, as providers acquire different health-care entities to diversify." Meanwhile, inpatient hospitals are "less likely to face severe trims … contrary to what hospital associations and most CEO's complain about," although "already struggling nonprofits" may have a different outlook (Sataline, 11/15).

In other Medicare spending news: "Pharmaceutical companies led by Eli Lilly & Co. are trying to eliminate a government panel aimed at controlling Medicare spending seven months after they supported the health-care overhaul that created it," Bloomberg reports. The panel, the presidentially appointed Independent Advisory Board, "has the ability to control drug prices by reducing the amount the federal Medicare program will pay for medicines." While the drug industry had previously promised to contribute $80 billion toward the overhaul, "helping Democrats offset new spending in the bill," manufacturers did not agree to the government's new price-setting powers under the law and will now "need help from Republicans who take control of the House next year to weaken or eliminate part of the law." Hospital chains are also behind the effort. While Republicans "won't try to exact revenge against drug companies for backing Obama's law," they "may ask the industry to propose ways to cut federal spending," said Bill Thomas, former chairman of the House Ways and Means Committee. "One way may be by agreeing to shorten the 12-year exclusivity period during which biologic drugs made from living cells are protected against lower-cost generic versions" (Edney and Young, 11/15). 

The Associated Press: Experts are saying that a "new Medicare drug plan with the lowest upfront cost in the country may not be for everyone." The new plan from insurer Humana and retail giant Walmart, which charges a monthly premium of $14.80 -- the lowest of any national plan -- is garnering attention as Medicare's open enrollment season begins. While the two companies are touting the plan as "an innovative solution" in today's market, "experts say if you can't get to a Walmart easily and need costly medications for intractable conditions, it could be a disappointment."  In some cases, residents of metro areas "may have to drive miles to find a preferred drugstore." About "27 million seniors and disabled people are signed up for the Medicare prescription benefit, offered through private insurance companies." This year, there may be more plan-switching than usual, "because about 3 million recipients will see their current plan discontinued in 2011 under a reorganization," and others will choose to shop around due to increased premiums (11/16).

The Wall Street Journal: Meanwhile, "Medicare officials are debating whether the agency should cover a new prostate-cancer treatment that costs $93,000 per patient," attracting criticism from patient advocacy groups and investors in Dendreon Corp., "who earlier pushed the Food and Drug Administration to approve the novel therapy" and argue the government is trying to "ration high-priced care." While " Medicare usually covers FDA-approved medicines without much debate," in June " the federal Centers for Medicare & Medicaid Services said it would undertake a national review of Dendreon's drug Provenge." A government health agency revealed last week that it found only "moderate evidence that it works." Medicare's decision will have significant implications for late-stage prostate cancer patients, "because some 70% of men who would likely be eligible for Provenge are covered by the federal program" (Mundy, 11/16).

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This article was reprinted from kaiserhealthnews.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.