It appears another short term "fix" was implemented when Congress avoided instituting the pay cuts for physicians providing care for Medicare beneficiaries last month. However, the problem must be addressed once again at the end of 2012.

Meanwhile, Kaiser Health News reports that CMS Chief Actuary, in testimony before the House Budget Committee, is warning, as he has in the past, that controlling cost growth is critical to the longevity and sustainability of the program. 

Medical societies urge use of other funding sources to avoid imminent cuts.

Our Take: Cuts to the level of physician pay for services provided to Medicare beneficiaries are, once again, looming in the near future. Each time the issue has arisen, efforts by Congress, to avoid the cuts have been aggressively undertaken. However, with each delay, the potential cut has grown. Presently that rate cut would be 27.4%, effective on March 1.  The push has been to repeal the sustainable growth rate formula (SGR) which is driving the rate cut. While there's been a repeated effort to do just that, it's not been accomplished to date. In this Medscape article, read more about strategies proposed by organized medical groups to address the pay cut. The  New York Times also explores the topic.

Accountable Care Organizations remain in the headlines on a variety of topics. This week several sources explored the potential financial returns they may or may not generate.

Our Take: This issue appears to have gained visibility in light of extremely high projected savings forecasted as being possible for ACOs. Estimates that the Pioneer program could produce up to $1.1 billion in savings in five years plunged the topic of financials associated with ACOs further into the forefront. Among considerations being discussed are the startup costs, accreditation costs and infrastructure expenses associated with the ACO's. There will definitely be much more written on this topic. In the meantime the scrutiny is likely to increase in light of this month's CBO Report indicating that some Medicare demonstration projects have not provided the financial returns that were originally anticipated.

Our Take: We touched on this in the Health Policy section above.  The long awaited report has triggered a range of responses, with stakeholders suggesting that although the lack of specifics was safe and avoided controversy, it might limit the potential impact the institute will have. Kaiser Health News offers an overview of the coverage on this subject.

Any action appears to be delayed until at least February

Our Take: This topic continues to generate controversy and garner attention. A variety of proposals over the past years have sought to address the cause of this recurring need to "fix" or delay pay cuts to physicians. The problem, rooted in the sustainable growth rate formula is one of many issues that Congress will be facing upon returning to Washington later in the month. Read or watch more on this topic at this Kaiser Health News link.

Our Take: First, regarding the STAR ratings; Managed Health Care Executive offered an overview of Medicare Advantage plan's five star quality rating system. The publication quotes experts who suggest that emphasis is being placed upon medication adherence in 2012, and that in order to attain a four star rating plans are likely to focus more on drug safety, drug safety and audits.

Enrollment in Special Needs Plans is up and three SNPs were able to attain five star quality ratings for 2012.  Read more on this by pasting this link in your browser http://aishealth.com/blog/medicare-advantage-and-part-d/snps-and-duel-duals

Without Congressional intervention, payments for physicians providing services for Medicare beneficiaries would be cut by nearly 30% on January 1 according to the SGR formula.

Our Take:   The Sustainable Growth Rate formula's proposed cuts have been delayed annually each year since the program's inception. Those cuts have accrued, to the extent that providers of services for Medicare patients would see cuts at the start of 2011. Some have hoped that the deficit reduction panel might address this issue as one element of their efforts. To date, there's no indication that this is the case.

Other proposals have been and continue to be suggested. Kaiser Health News reports on a proposed framework developed by Pennsylvania's Rep. Schwartz to repeal the SGR formula and replace it with an alternative which would have CMS developing four new payment models.  Customarily, delays in approving alternatives to the cuts have resulted in Medicare claims being held. To date, it's not evident that progress has been made to avert the situation from recurring at year end.

The situation is discussed further in Kaiser Health News

Our Take: The news that Medicare prescription drug plans are receiving poor ratings on the program's star rating system continues to gain attention. The article, (above) is one of many sources which explores the subject, and the hope that publication of this data will help senior's in evaluating plans during the current open enrollment period.

Medicare premium hike lower than anticipated as Medicare physician pay cut still lurks, although slightly modified.  

The original pay cut scheduled to go into effect in January is nearly 30%. A recent announcement indicates that the actual cut, without Congressional intervention is slightly lower, at about 27.4%

Our Take: This is a recurring problem, and one which is likely to remain unresolved unless it becomes part of a larger solution. Perhaps it will be amongst the considerations included in the overall debt reduction initiatives of the super committee. In each of the past several years, an annual allowance has been made. As a result, the decrease has been moved forward.

At this point, the cuts would be unreasonable and there's wide speculation that a cut of this magnitude would seriously impact access to providers for Medicare beneficiaries. It's expected that some arrangements will be made, however the terms and time frame remain unclear.  In the meantime, The New York Times and other sources write about the smaller than anticipated increase in premiums for Medicare Part B. At 3.6% the increase is less than expected, with most beneficiaries paying about $3.50 per month more than they had in 2011.