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Medicare Payment Reductions Affect Access to LTC

Tue, 05/16/2000 - 11:00pm — Karen Stevenson
Description: 

The Medicare Payment Advisory Commission (MedPAC) reported to Congress that Medicare payment reductions authorized by the Balanced Budget Act of 1997 (BBA-1997) have impacted access to post-acute care (including nursing home and home health care) by recipients with the most severe care needs. The MedPAC report notes that discharge planners and other referral sources indicated that placement for patients with significant care needs has been more difficult since payment rates were reduced by BBA-1997. The MedPAC report also noted that 14% of home health agencies have closed since 1997, as further evidence that payment cuts may have been excessive.

The MedPAC report also addressed the large number of terminations in managed care plans from the Medicare Choice+ program. They observed that 407,000 beneficiaries were forced to change their plans in 1999 and 327,000 in 2000, while 50,000 beneficiaries lived in counties with no other managed care alternative in 1999, and 79,000 were in that situation in 2000.

MedPAC concluded that many of these problems exist because the legislation had the conflicting goals of reducing spending and enriching benefits. They noted that many managed care plans are reducing the prescription drug coverage in their plans due to cost pressures, and that these reductions will probably increase in the future as prescription drug prices continue to escalate. They also noted that access to a Medicare managed care plan is most problematic in rural areas.

The Medicare Payment Advisory Commission (MedPAC) reported to Congress that Medicare payment reductions authorized by the Balanced Budget Act of 1997 (BBA-1997) have impacted access to post-acute care (including nursing home and home health care) by recipients with the most severe care needs. The MedPAC report notes that discharge planners and other referral sources indicated that placement for patients with significant care needs has been more difficult since payment rates were reduced by BBA-1997. The MedPAC report also noted that 14% of home health agencies have closed since 1997, as further evidence that payment cuts may have been excessive.

The MedPAC report also addressed the large number of terminations in managed care plans from the Medicare Choice+ program. They observed that 407,000 beneficiaries were forced to change their plans in 1999 and 327,000 in 2000, while 50,000 beneficiaries lived in counties with no other managed care alternative in 1999, and 79,000 were in that situation in 2000.

MedPAC concluded that many of these problems exist because the legislation had the conflicting goals of reducing spending and enriching benefits. They noted that many managed care plans are reducing the prescription drug coverage in their plans due to cost pressures, and that these reductions will probably increase in the future as prescription drug prices continue to escalate. They also noted that access to a Medicare managed care plan is most problematic in rural areas.