Medicare Privatization Ahead?


Deregulation and some privatization of Medicare will likely serve as the overarching goal of Republican lawmakers designing changes to the Medicare program, attorney Susan Feigin Harris told me Nov. 17.

Harris, with Baker & Hostetler LLP in Houston, advises hospitals and health systems on reimbursement issues.

A powerful Republican lawmaker with ties to President-elect Donald Trump floated the idea of using the budget reconciliation process as a way to pass conservative Medicare reforms. That lawmaker, House Budget Committee Chairman Tom Price (R-Ga.), met with Trump in New York Wednesday and is rumored to be among those in consideration to lead the Department of Health and Human Services.

Health-care reform proposals put forth by House Speaker Paul Ryan (R-Wis.) and conservative think tanks, such as the American Enterprise Institute and the Heritage Foundation, call for giving Medicare Advantage (MA) plans greater flexibility, Harris explained. Under these proposals, MA organizations could design their plans to allow for more value-based insurance, she added.

In addition, there are some Republican proposals to combine Medicare Part A, which covers treatments at hospitals and several post-acute care providers, with Part B, which largely reimburses doctors for their services, Harris told me. Parts A and B have different payment rates. The rationale of combining the systems is to recognize what’s already happening in the marketplace—that is, there is already a great deal of care integration and coordination between hospitals and physicians, Harris said.

However, combining the two systems may prove to be far more complicated than anyone anticipates, Harris explained to me. Many legal entanglements would arise. For example, there could be questions about whether the federal anti-kickback statute that providers must abide by would survive under a combined system, Harris added.

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