Cut in Medicare Payments to Hospitals Is Advised

http://www.nytimes.com/2005/01/18/politics/18medicare.html

January 18, 2005
Cut in Medicare Payments to Hospitals Is Advised
By ROBERT PEAR

ASHINGTON, Jan. 17 - An influential federal advisory panel has voted to recommend a cut in Medicare payments promised to hospitals and a freeze in payments to nursing homes and home care agencies in 2006.

The recommendations to Congress, approved by the panel last week, give powerful support to Republican lawmakers and Bush administration officials who want to curb soaring Medicare costs, as part of their overall effort to reduce the federal budget deficit.

The panel, the Medicare Payment Advisory Commission, voted to recommend a 2.7 percent increase in Medicare payments to doctors. That is less than the expected increase in doctors' costs, but substantially more than doctors would get under current law. Because of a quirk in the Medicare formula, payments to doctors will be cut 5 percent next year if Congress takes no action.

Congress usually pays close attention to the advice it receives from the independent 17-member commission, composed of health policy experts, economists and providers of care. The panel will include the recommendations in its annual report to Congress in March.

Medicare covers 41 million elderly and disabled people. The cost climbed 8.4 percent last year, to $300 billion, and is expected to increase 30 percent from 2005 to 2007, with the introduction of a drug benefit.<snip>