Senators: Reimbursement Fix Should Be Part of Medicare Buy-In

Expansion Could Limit Access in States with Low Reimbursement Rates

Friday, December 11, 2009

WASHINGTON, DC - Senators Jeff Merkley (D-Ore.), Amy Klobuchar (D-Minn.), Byron Dorgan (D-N.D.), Maria Cantwell (D-Wash.), Russ Feingold (D-Wis.), Al Franken (D-Minn.), Tim Johnson (D-S.D.), Patrick Leahy (D-Vt.), Jeanne Shaheen (N.H.), Mark Udall (N.M.), Tom Udall (N.M.), and Ron Wyden (D-Ore.) sent a letter to Senate Majority Leader Harry Reid (D-Nev.) today highlighting their concerns regarding plans to expand Medicare to Americans between the ages of 55-64 without addressing inequities in current Medicare reimbursement rates.  Such an expansion could exacerbate existing provider shortages in states that have low reimbursement rates.

Under the current Medicare system, states with more efficient health care systems are punished with reimbursement rates that lag significantly behind the rates of other states.  Because states with low reimbursement rates already face a shortage of providers willing to accept patients on Medicare, an expansion of the program would simply see the same issue expanded to Americans between the ages of 55-64.

“We are concerned that a possible final health care compromise may include a Medicare buy-in program for Americans aged 55-64 without addressing inequities in the current Medicare reimbursement rates,” the senators wrote.  “We appreciate the rationale underlying the proposed Medicare expansion, but fear that provider shortages in states with low reimbursement rates such as ours will make such a program ineffective, or even worsen the problems these states are experiencing.”

 To remedy the situation, the senators urged Majority Leader Reid to hold on any expansion unless steps are taken to provide incentives for providers to see more Medicare patients.

The full text of the senators’ letter to Majority Leader Reid appears below.

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 December 11, 2009

The Honorable Harry Reid

Majority Leader of the Senate

S-221 Capitol Building

Washington, D.C. 20510

Dear Majority Leader Reid:

Thank you for all of the hard work you and your entire leadership team are doing to advance historic health care reform legislation. We appreciate the difficult task you are faced with and stand ready to assist you in facilitating this process. We are concerned however that a possible final health care compromise may include a Medicare buy-in program for Americans aged 55-64 without addressing inequities in the current Medicare reimbursement rates. We appreciate the rationale underlying the proposed Medicare expansion, but fear that provider shortages in states with low reimbursement rates such as ours will make such a program ineffective, or even worsen the problems these states are experiencing.

Our states consistently lag behind other states on Medicare reimbursement and per capita spending. While there are provisions in the Senate bill to eventually adjust the geographic disparities in Medicare, possible improvements to the funding formula, if they occur, will be years away. We strongly believe that a fundamental way to achieve the goal of more efficiency in Medicare is to realign the Medicare payment system to reward health care providers for the quality of care they deliver, not simply the quantity of services they provide.

We represent states and regions that have demonstrated true leadership in lowering costs to Medicare while increasing the quality of care patients receive. The “high efficiency” areas we represent are known for utilizing integrated health delivery systems and innovative quality measures to provide Medicare beneficiaries with better value. Research shows that these efficient delivery practices can save the Medicare program upwards of $100 billion a year, while also providing beneficiaries better access to the care they need. Unfortunately, the current Medicare payment structure penalizes those who provide efficient care, while rewarding those who order unnecessary tests and services.

Creating a Medicare buy-in program will exacerbate the existing funding inequity. Medicare is spending over one-third more for each Medicare beneficiary in some states compared to ours. The combination of an antiquated payment formula that tends to penalize rural providers and greater medical efficiency in our states has forced many physicians to stop accepting Medicare patients or limit the number of Medicare patients they serve. Increasing the number of Medicare patients under a buy-in proposal without fixing the Medicare reimbursement rate will further exacerbate this access problem. To make a Medicare buy-in program successful, it is critical that we find ways to incentivize providers to see more Medicare patients.

We thank you for your continued vigilance in working to move the process forward. We look forward to working with you towards resolution of this particular problem and passage of historic health care reform legislation.