After reading the umpteenth similar press release on the crippling effects of medicare reductions on the PT world, I thought I would point out something-regardless of whether Bush vetoes the bill (he will) and then it is overridden (it will), medicare rates are going to go down regardless-here’s why.
The funding for the elimination of the reduction is based on re-financing medicare advantage plans. These plans are either paid higher than the government can do it themself by roughly either 14% for the HMO type or 17% for the FFS type. The FFS type was only supposed to by a temporary plan to entice medicare folks to go into private medicare but for reasons only best understood by folks who also understand farm subsidies, FFS additional payment has not gone away. Under the new payment terms by medicare (to pay them the same rate as CMS), it will be gone.
Which brings us to the reason why our rates will go down. Medicare Advantage plans will begin to substantially decrease payments to providers in order to “survive” (keep in mind survival to an insurance company means millions in stock options to the CEO). Many Advantage plans were already negotiating heavily with providers for below CMS rate plans even under their premium payment by CMS. Of course, educated readers of this blog would never accept below CMS rates-hopefully they continue not to accept but if history is any teacher, many will cave to below CMS rates.
