NYT
http://www.nytimes.com/2006/07/17/us/17medicare.html?ex=1310788800&en=8e92268705506c0c&ei=5088&partner=rssnyt&emc=rssBush Administration Plans Medicare Changes
By ROBERT PEAR
Published: July 17, 2006
WASHINGTON, July 16 — The Bush administration says it plans sweeping changes in Medicare payments to hospitals that could cut payments by 20 percent to 30 percent for many complex treatments and new technologies.
The changes, the biggest since the current payment system was adopted in 1983, are meant to improve the accuracy of payment rates. But doctors, hospitals and patient groups say the effects could be devastating.
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A coalition of patient organizations, including the Parkinson’s Action Network and the Society for Women’s Health Research, told the government in a letter that the new system “could have a devastating impact on payment for critical treatments for seriously ill patients, with reimbursement for some essential procedures cut as much as 30 percent.”
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“This is a bit of a catastrophe,” said Dr. Herbert Pardes, president of NewYork-Presbyterian Hospital. In its zeal to cut the profits of doctor-owned specialty hospitals, including cardiac hospitals, Dr. Pardes said, the government has inadvertently hit many nonprofit academic medical centers.
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Hospitals and members of Congress are also complaining about the role of a government contractor that helped develop the new payment system and now stands to profit from it.
The new system is based on a commercial product developed by 3M Health Information Systems, a unit of 3M, the Minnesota-based technology company. In July 2005, the Bush administration awarded a “sole source contract” to 3M, to analyze whether it was feasible for Medicare to use a payment system modeled on the 3M product. The company said yes.
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