Health Care Update

Healthcare System Plagued By “Perverse Incentives,” Expert Says.

In an op-ed in the Washington Times  (4/25), John C. Goodman, president of the National Center for Policy Analysis, says that while the Medicare Trustees Report released Monday “is a serious document reflecting accepted accounting principles,” the document presented by the Obama Administration on the eve of its release “was clearly a piece of political propaganda” that greatly “stretched the truth.” Goodman disputes the Administration’s assertion that “Obamacare will save taxpayers $200 billion in the Medicare program through 2016,” and scrutinizes the Administration’s “preferred organizational form of health care delivery — accountable-care organizations” — as well as “other demand-side reforms” that he argues only provide “high-quality, low-cost care” when they have “originated on the supply side of the market, not the demand side.” According to Goodman, “the fundamental problem in health care is that people in the system face perverse incentives,” thus changing “perverse outcomes” requires changing “the incentives that lead to them.”

CMS Proposed Rule Would Increase Inpatient Payment Rates To Hospitals By 2.3%.

CQ  (4/25, Reichard, Subscription Publication) reports, “The Centers for Medicare and Medicaid Services announced a proposed rule Tuesday that would increase inpatient payment rates to hospitals by 2.3 percent in the fiscal year starting Oct. 1, 2012.” CMS “added in a news release that ‘the rate increase, together with other policies in the proposed rule and projected utilization of inpatient services, would increase Medicare’s operating payments to acute care hospitals by approximately 0.9 percent in FY 2013.'”

Modern Healthcare  (4/25, Zigmond, Subscription Publication) reports, “Also under the proposed rule, payments to long-term acute-care hospitals are expected to increase by about 1.9%, or about $100 million, next year.” in a news release, acting CMS Administrator Marilyn Tavenner said, “The proposed rule would implement key elements of the Affordable Care Act’s value-based purchasing program as well as the hospital readmissions reduction program. It also establishes the groundwork for extending Medicare’s quality reporting programs beyond general acute-care hospitals to other types of facilities.” Also covering the story is Dow Jones Newswires  (4/25, Tadena, Subscription Publication).

Disability Insurance Payments Growing With Little Discussion.

A front-page Business section story in the New York Times  (4/25, B1, Porter, Subscription Publication) reports that while disability insurance payments “are growing out of control,” fixing the program “inspires hardly any discussion.” Mark Duggan, an economist at the Wharton School of the University of Pennsylvania, remarked, “The health of nonelderly Americans is improving consistently, and we have more technology to help people at work. Yet every year the fraction of people on this program is growing.” The Times notes that growth “is not simply about demography. Rather, it is driven by two other factors: a job market that has become tough to navigate for workers with low skills, especially men, whose jobs have gone abroad or been taken by machines; and a basic flaw in the disability program that discourages people from ever working again.”

Lawsuit Challenges Law Making Florida Counties Responsible For Unpaid Medicaid Bills.

The Sarasota (FL) Herald Tribune  (4/25, Wells) reports that Florida “has racked up $325 million in unpaid Medicaid bills after 10 years of computer errors and deception by patients, and the dispute over who should pick up the tab is raising concern in this region. On Tuesday, Sarasota County opted to join 30 Florida counties and the Florida Association of Counties in a lawsuit challenging a new law that would push the responsibility for the bills from the state onto county governments.”

Florida Bust Used As Example In Efforts To Fight Medicare Fraud.

CQ  (4/25, Reichard, Subscription Publication) reports, “Enforcement officials at a Senate Finance Committee hearing Tuesday laid out how a Florida strike force of federal and local officials last fall produced what Chairman Max Baucus called ‘the largest Medicare fraud bust in history.'” While Baucus “called the hearing to learn what could successfully be gleaned from the bust and applied elsewhere,” Miami-based US Attorney Wilfredo A. Ferrer “cautioned lawmakers that ‘we cannot prosecute our way out of this,” emphasizing that fraud prevention methods must be found first.