Plans For Reducing Medicare Costs

Among the reforms Weems said the administration is seeking the implementation of a value-based purchasing program that ties a hospital’s base payment for each discharge to a set of measures gauging their performance. “Hospitals would be provided an opportunity to achieve bonus payments for either improving performance on a set of measures or achieving a high level of absolute performance,” Weems said.

Additionally, the budget proposal would establish a requirement for facilities to report “never events,” which Weems described as “unambiguous, usually preventable, serious medical errors,” and would deny Medicare payment for services connected to such events. Any facility found to have failed in reporting such an event, he said, would suffer a 2 percentage point reduction to their annual update.

Weems also said the budget calls for extending the Part B income related premium adjustment into the Medicare Part D prescription drug program. “This proposal would increase premium amounts for the Medicare drug benefit for high income Medicare beneficiaries in a manner similar to what is currently applied in the Part B program.”

One of the more contentious debates between Congress and the White House during the past year has involved the extension of the State Children’s Health Insurance Program, or SCHIP. In his testimony, Weems maintained the administration’s argument that it is seeking to ensure that the program will remain focused on the poorest of children rather than the Congressional proposal that would have allowed states to extend the program to those over twice the federal poverty line.

The budget request, he said, would increase funding to the states by $19.7 billion over the next 4 years, with $450 million in outreach grants. “With this SCHIP reauthorization proposal, we are re-affirming our commitment to covering low-income uninsured children and promoting a fiscally responsible SCHIP program that will be available for the children who need it the most,” he said.