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Medicare Watch

Your Weekly Medicare Consumer Advocacy Update

Keeping Tabs on Medicare Physician Payment Reform

February 13, 2014

Medicare Rights Expresses Cautious Optimism about Bipartisan Agreement on Medicare Physician Payment Reform

In a statement released this week, Joe Baker, President of the Medicare Rights Center, urged cautious optimism about a bipartisan agreement on repealing and replacing the Sustainable Growth Rate (SGR) formula. The SGR formula is used to control Medicare payments to physicians. For the last decade, application of the SGR formula would have resulted in drastic cuts to payments for Medicare providers. Congress must act annually to avert these severe cuts.

This latest agreement would repeal the SGR formula and allow for guaranteed annual reimbursement increases of 0.5% for Medicare providers over the next five years. Additionally, a reimbursement system would be developed that focuses on high value care when determining Medicare provider reimbursements through alternative payment models. An example of these models includes Accountable Care Organizations (ACOs), designated teams of physicians, hospitals and other providers who are paid on the basis of how well care is coordinated and the quality of the care provided.

In his statement, Mr. Baker said, “We are encouraged that Congress appears committed to advancing a Medicare payment system centered on high-value care, as opposed to high-volume care. Yet, we cannot evaluate the merits of this agreement in a vacuum. Congress has yet to make critical decisions about extenders policies of critical importance to people with Medicare and about how the SGR package will be paid for. First and foremost, Congress must make the Qualified Individual (QI) program permanent. The QI program provides a lifeline to low-income Medicare beneficiaries who would otherwise struggle to afford basic Medicare premiums.”

Addressing potential offsets to pay for Medicare physician payment reform, Mr. Baker said, “Congress must not adopt policy proposals that shift added costs to people with Medicare—through higher premiums, deductibles, copayments or coinsurance. Most people with Medicare simply cannot afford to pay more, and should not be expected to shoulder the burden for paying for a broken Medicare payment system.”

Read Medicare Rights’ statement.

Study Finds Telemedicine Can Decrease Nursing Home Hospitalizations

A recent Commonwealth Fund-sponsored study suggests that the use of telemedicine in nursing homes can help reduce hospitalizations of nursing home residents. A lack of physicians on call after hours and on the weekends causes many nursing home residents to be sent to the hospital for treatment if they need care outside of regular hours, even if they could be treated outside of the hospital. These unnecessary hospitalizations increase the resident’s likelihood of experiencing negative health incidents or even death.

This study investigates one potential solution to the lack of physicians on call for nursing homes—telemedicine. Telemedicine allows patients to virtually “visit” with a physician using technology. For example, some telemedicine models allow the patient to meet with the doctor through a two-way video.

According to the study, telemedicine was found to significantly reduce hospitalization rates in nursing homes that were “more engaged” as defined by the frequency and type of calls made using telemedicine. There was not a significant difference in hospitalization rates between nursing homes that were “less engaged” in telemedicine and those that did not use telemedicine at all.

Reduced hospitalizations are equivalent to better health for residents, as well as increased Medicare savings. The study calculated that, based on the savings in the “more engaged” nursing homes, Medicare could save about $120,000 per nursing home per year when the cost of telemedicine technology is taken into account.

These results suggest that telemedicine is an effective way to decrease unnecessary hospitalizations in nursing home residents and save Medicare dollars. The study recommends that Medicare create financial incentives for nursing homes to implement telemedicine with staff support. Some new health care delivery models, such as ACOs, allow facilities to share in savings and already encourage use of telemedicine. Medicare can further encourage telemedicine adoption in nursing homes by continuing to support existing and new innovative health care delivery models.

Read Commonwealth’s summary of the study.

Volume 5, Issue 6

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Medicare Reminder

Medicare may help pay for skilled nursing facility (SNF) care if you meet the following requirements:

  • You need skilled nursing care seven days a week or skilled therapy services at least five days a week;
  • You were formally admitted as an inpatient to a hospital for at least three consecutive days;
  • You enter a Medicare-certified SNF within 30 days of leaving the hospital;
  • You have Medicare Part A before you are discharged from the hospital; and
  • You need care that can only be provided in a SNF.

If you meet these requirements, Medicare should cover your SNF care. However, you should keep in mind that Original Medicare only covers up to 100 days of SNF care per benefit period. Your benefit period begins the day you become an inpatient in the hospital and ends when you have been out of the hospital and skilled nursing facility for 60 days in a row.

Learn more about Medicare coverage of SNF care on Medicare Interactive.



Last month, the Alliance for Health Reform and The Kaiser Family Foundation (KFF) held a briefing to discuss the impact of various proposals to save money in Medicare and reduce the federal debt by shifting costs on to people with Medicare.

The briefing included a panel of health care experts who provided information about the current state of health and economic security among people with Medicare, as well as the impact of some of the most discussed cost-shifting proposals, including raising Medicare premiums for beneficiaries with higher income and placing restrictions on Medigap supplemental coverage.

 Visit KFF’s website to watch the briefing.


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© 2013 by Medicare Rights Center. All rights reserved.

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