Medicare spending projections over the next decade

Medicare payments to physicians are slated to be cut by just over 20 percent in 2010, according to a report from the Medicare Trustees. However, Juliette Cubanski, PhD, MPH, principal policy analyst at the Henry J. Kaiser Family Foundation, says, “It’s unlikely that a cut of that magnitude will actually take effect, as Congress usually steps in.”

She says that the payments to Medicare Advantage plans are also subject to much discussion and will be of interest to health plans because Congress is likely to reduce those payments. Research conducted by MedPAC and other groups suggests that the government is paying MA plans more than it would have paid in traditional Medicare for equivalent care.

“Health plans look to the Medicare fee-for-service rates to set their own payments to physicians. So whatever Congress decides to do with payment to physicians in Part B could have some spillover effect on the Medicare Advantage part of the program,” says Cubanski.

Source: The Henry J. Kaiser Family Foundation. Update on Medicare Spending and Financing and Highlights from the 2009 Medicare Trustees’ Report, May 2009

MANAGED CARE June 2009. ©MediMedia USA