How the 2016 Budget Will Change Medicare and Medicaid
2016 Budget plans will have both improvements and challenges for Medicare and Medicaid providers.
- On Monday, February 2, 2015, President Barack Obama released the 2016 Federal budget. It reveals plans for saving federal money on Medicaid and Medicare which will have both improvements and challenges for providers.
The budget aims to continue the decrease in Medicare and Medicaid spending. This has often been a point of contention for the American Medical Association (AMA) and providers, as it had not been made clear until the release of the budget how the spending decrease would be achieved.
The budget proposes the following to improve payment efficiency in the Medicare program:
- Improving payment accuracy for Medicare Advantage plans
- Constraining Medicare cost growth
- Aligning payments to teaching hospitals with patient care costs
- Addressing excess payments for Medicare Part B drugs to hospitals and physicians
The budget suggests that the above changes would save approximately $222 billion within 10 years.
It also proposes to reduce Medicare payments to hospitals for bad debt. As previously reported, bad debt may have a link to low or poor patient payment collections. Although updating their payment policy systems may help a hospital improve their bad debt problems, they may struggle to make ends meet in the meantime.
Another major focus within the budget is on improving quality while lowering the costs of drugs for the Federal Health Programs. Within the proposal, the budget suggests allowing the Secretary of the Department of Health and Human Services (HHS) the ability to negotiate drug prices for certain drugs for Medicare Part D to help ensure that beneficiaries can access and afford these treatments.
Additionally, the budget will establish a program to reduce prescription drug abuse within the Medicare program. This, along with the HHS Secretary negotiating prices for drugs, is anticipated to save the Medicare Program approximately $126 billion over a span of 10 years.
A large focus is also drawn to improving the fraud, waste, and abuse problems within Medicare and Medicaid. The creation of the Health Care Fraud and Abuse Control program in 2013, proved to be a good first step, saving the government $4.3 billion in court fees and tax-payer money.
This is only scratching the surface of a much larger problem, so the budget suggests a new series of policies to continue to improve on putting an end to fraud, waste, and abuse in the system.
The proposed policies include:
- Requiring prior authorization for power mobility devices and advanced imaging
- Tracking high prescribers and utilizers of prescription drugs in Medicaid to identify uncommon variations in billing and prescribing patterns
- Continue to investigate and prosecute allegations of abuse or neglect of Medicaid beneficiaries
- Improve Medicaid Integrity Program to aid the Federal Government’s ability to identify and act on fraud, waste,and abuse
These new policies are estimated to save $3 Billion over the next 10 years.
The Budget also revealed some good news for providers in the form of the repeal of the Medicare Sustainable Growth Rate formula. Repealing this formula could improve Medicare payment rates to Medicare providers.
Another positive note contained in the budget for providers is the investment of $4.2 billion in the Health Centers program to allow health centers to expand their services to more patients. As well as the funding ($8.10 Million) to maintain and place 15,000 providers where they are most needed.
