Evil Trend Factor To Attack Private Pay Plans Soon

With the looming threat of an almost 30% cut in reimbursement under Medicare, cost shifting to private pay plans will take an historic turn for the worse.  Remember that nasty little term called “Trend?”  Insurance companies have traditionally blamed advanced medical technology and an aging population as the key components. Instead, should we point to the Washington political elite as the root cause?

“Physicians, facing a 29.5% Medicare Sustainable Growth Rate (SGR) fee schedule cut on January 1, 2012, need to be reallyworried. That 29.5% cut is part of the existing budget baseline from which the super-committee needs to cut hundreds of billions more–much less find tens of billions of dollars to put these doc cuts off again.

Hospitals … have to be in the bull’s eye this time.

Drug companies are a particularly juicy target for liberals who don’t like them and conservatives who wish the Part D program had never been passed. Medicare Advantage insurers have recently been reporting record profits–not
something you want to be doing when the Congress is looking for lots of cash.

While there is a 2% cap on any cuts that could occur to Medicare in the $1.2 trillion default trigger, there are no limits to what the super-committee can cut.” [emphasis added]

My view is there are going to be big cuts in provider reimbursement, which will inevitably lead to cost-shifting to private
payers. That means insurers, healthplans, self-insured employers, and workers comp payers can expect higher pricing and utilization, and soon.

Editor’s Note: Source of quote from Joe Paduda’s website.

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