Trustees Say Medicare Hospital Trust Fund Exhausted in 2024 and WellPoint Reimbursement Increases Now Tied to Hospital Quality Indicators

CAL/AAEM News Service calaaem.news.service1 at gmail.com
Fri Jun 3 08:06:02 PDT 2011



May 16, 2011
Trustees Say Medicare Hospital Trust Fund Will Be Exhausted in 2024

California Healthline

The Medicare Hospital Insurance Trust Fund will be exhausted in 2024, five years earlier than last year's estimates, according to the annual Social Security and Medicare Trustees report (Ohlemacher, AP/Bloomberg BusinessWeek, 5/13).
Medicare has been paying out more than it has taken in since 2008. In 2010 alone, the program spent $535 billion and used $32 million from its trust fund -- which is funded by payroll taxes -- to compensate for shortfalls (DoBias, National Journal, 5/13).

The trustees attributed the accelerated insolvency to higher provider salaries and the continued effect of the recession, which has reduced Medicare tax receipts and increased expenditures (Daly, Modern Healthcare, 5/13).
Once the trust fund runs out in 2024, Medicare no longer will be able to pay 100% of benefits. The trustees estimate that the program could pay 90% of benefits beginning in 2024 and 75% of benefits starting in 2045 (Wolf, "The Oval," USA Today, 5/13).

Effect of Health Reform
Commenting on the report, the Obama administration noted that the federal health reform law added eight years of solvency to the Medicare trust fund and that, without reform, the fund would be depleted by 2016 (CMS release, 5/13).

"We have heard in today's Medicare Trustees report that there is no question we've strengthened Medicare," HHS Secretary Kathleen Sebelius said, adding, "But there is still work to be done" (National Journal, 5/13).
However, USA Today noted the Medicare estimates are "suspect" because they rely on billions of dollars in savings projected under the overhaul, such as:
	• Cuts to physicians' Medicare payments; and
	• Improvements in health care providers' productivity ("The Oval," USA Today, 5/13).

GOP Reaction
Responding to the report, House Speaker John Boehner (R-Ohio) and other GOP lawmakers reiterated their recent calls for entitlement reform.
Boehner said that the new report validates a proposal in the GOP's House-approved fiscal year 2012 budget resolution (H Con Res 34) that would address the threat to Medicare's solvency by transforming it into a voucher program. "We're still waiting to see a similar plan from President Obama and the Democrats who run Washington," he said (Harrison, CQ Today, 5/13).


Read more: 
http://www.californiahealthline.org/articles/2011/5/16/trustees-say-medicare-hospital-trust-fund-will-be-exhausted-in-2024.aspx#ixzz1Mf5ZoEws
 
 



May 16, 2011
WellPoint reimbursement increases now tied to hospital quality indicators

Fierce Healthcare

By Alicia Caramenico

In keeping with the trend to move hospital reimbursement from volume-oriented to quality-oriented, Indianapolis-based WellPoint (NYSE: WLP) will halt annual payment increases to about 1,500 hospitals if they fail to meet its treatment quality criteria.

Reimbursement increases for hospitals in 14 states that serve WellPoint's Blue Cross Blue Shield plans will be tied to a 51-indicator test, reports the Wall Street Journal. Health outcomes account for 55 percent of a hospital's score, patient safety determines 35 percent and patient satisfaction represents 10 percent.

For example, hospitals that try to prevent patients from relapsing after they leave the hospital, follow a safety checklist, or prohibit smoking in its facilities for patients, workers and visitors would score high on the treatment quality test, notes theJournal.

So far, WellPoint is the first major health insurer to require all hospitals serving its affiliated plans qualify for a payment increase, according to the Journal. About 500 of its hospitals already participate in a voluntary version of the new system, and get average pay increases of 7 to 9 percent each year.

WellPoint intends to use the new, mandatory system to save the health insurer and the overall healthcare industry money, WellPoint's Chief Medical Officer Samuel Nussbaum told the newspaper. He said the system could decelerate its inpatient care spending by three to five percentage points annually over time.

For more, read the Wall Street Journal article here.
 
 
 
Anna Parks &
Brian Potts MD, MBA
Managing Editors, CAL/AAEM News Service

 
 
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