CBO Presents Possible Budget Options for Medicare Program

Medicare Set-Aside Blog on December 19, 2008
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The Congressional Budget Office
(CBO) recently released a 235 page report entitled “Budget Options, Volume I, Health Care.”

In the report, the CBO
presents 115 options for reducing (or, in some cases, increasing) Federal
spending on health care, altering Federal health care programs, and making
substantive changes to the nation’s health insurance system. However, the CBO
makes no recommendations in the report. 

Nevertheless, the CBO
report identifies and discusses numerous options for the Medicare
program.  In brief, the options pertaining to the Medicare program include
(but are not limited to):

Bundling payments for
hospital care and post-acute careReducing Medicare
payments to hospitals with high readmission ratesAllowing physicians to
form bonus-eligible organizations and receive performance-based paymentsPaying primary care
physicians in Medicare using a partial-capitation system with bonuses and
penaltiesPaying for a medical
home for chronically ill beneficiaries in fee-for-service MedicareRequiring prior
authorization for imaging services under MedicareRequiring drug and
device manufacturers to disclose their relationships with physicians who
participate in MedicareCreating incentives in
Medicare for the adoption of health information technologyRequiring the use of
health information technology as a condition of participation in MedicareReducing Medicare’s fees
for physicians in areas with unusually high spendingReducing Medicare’s
payment rates for hospitals in areas with a high volume of elective
inflation-related updates to Medicare’s payment rates for home health care
for 5 yearsReducing the update
factors by 1 percentage point for: hospital inpatient operating payments;
payments to providers for post-acute care; and/or payments to skilled
nursing facilitiesModifying the
sustainable growth rate formula for updating Medicare’s physician payment
ratesRequiring a copayment
for home health episodes covered by MedicareEliminating the
“doughnut hole” in Medicare’s drug benefit designReducing Medicare
payment rates for primary care physicians who do not meet benchmarks for
influenza vaccination

For additional
information, see the CBO’s report entitled “Budget Options, Volume I, Health Care.”

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