President's Budget Devotes
Attention to Implementing Prescription Drug Legislation; No
Additional Medicare Cuts to Teaching Hospitals and Academic
Physicians
February 6, 2004 - The President's FY 2005 budget
proposal identifies the implementation of the "Medicare
Prescription Drug, Improvement, and Modernization Act of 2003
(MMA)" as a top priority of the Department of Health
and Human Services (HHS) and Centers of Medicare and Medicaid
Services (CMS). Because the Medicare budget assumes that providers
will be reimbursed at levels set forth by the MMA, there are
no additional proposals to cut reimbursements to teaching
hospitals and academic physicians. However, the budget does
include proposals to assess $205 million in provider user
fees and change policies affecting durable medical equipment
and Medicare Secondary Payors.
The bulk of the Medicare budget documents include descriptions
of the provisions included in the Medicare reform law: providing
a discount prescription drug card and voluntary prescription
drug benefit; expanding private plan choices for Medicare
beneficiaries; improving Medicare fee for service benefits;
combating waste, fraud and abuse; reforming regulatory procedures;
and increasing payments to hospitals, physicians and other
providers.
The budget also incorporates a higher cost estimate of the
Medicare reform law than the 10-year $395 billion estimate
provided by the Congressional Budget Office (CBO). The document
states that recent estimates by Medicare actuaries have put
the cost of the bill at $534 billion over 10 years. "The
largest portion of the difference in these cost estimates
is attributable to assumptions regarding beneficiary participation,
market behavior, and cost growth rates," states the HHS
budget document. Medicare spending on benefits is estimated
to total $324.6 in FY 2005.
In addition, the budget proposes $205 million in provider
user fees for FY 2005 that would allow the Secretary of HHS
to assess fees associated with the submission of duplicate
or unprocessable claims. Fees could also be assessed to providers
who file a Medicare claims appeal.
The budget also includes two legislative proposals that would
affect policies for durable medical equipment (DME) and Medicare
Secondary Payors. The proposals are estimated to save the
Medicare program $130 million in FY 2005.
The provider user fee proposal, the DME and Medicare Secondary
Payor proposals would have to be acted upon by Congress before
CMS implementation.
Information:
Lynne Davis Boyle, Assistant Vice President
AAMC Government Relations
ldavisboyle@aamc.org
(202) 828-0526
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