Friday, October 16, 2009

Medicare Magic

When is a budget cut not a budget cut? When the cost is in a separate spending bill . . .

Congress is playing tricks with your money, but then, why is this news?

In an effort to make Obamacare "deficit neutral" Congress proposes $500 billion in Medicare cuts over the next 10 years. CMS (Center for Medicare Services) already has in place a 21% cut in physician fee's to kick in on January 1, 2010.

But wait!

CMS has proposed cuts in physician fees every year for the last (I lost count) several years and each year, under pressure from physician groups, somehow finds the money to wipe out the cuts and even pay a little more than the year before.

But this time they really mean it. Physicians are getting rich on Medicare and the country needs them to man up (or woman up as the case may be) and take one for the good of the country.

So how will Congress make Obamacare deficit neutral and keep the $500 billion in forecasted savings?

By passing a separate bill allowing physicians to remain whole.
Majority Leader Harry Reid (D-Nev.) on Wednesday morning quietly set in motion legislation that could cost more than $200 billion over 10 years – without cuts or revenue to offset the spending -- on a separate track from a larger healthcare bill that President Barack Obama and Senate Democratic leaders have vowed would not add to the budget deficit.

How is that for being sneaky?

They cut Medicare by $500 billion in one bill and increase Medicare funding by $200 billion in a completely separate bill.

Problem solved!
Obama and Democratic leaders in Congress has been adamant that “paygo” would reign when it comes to new spending or tax cuts. The healthcare reform bill, with a cost ranging from just over $800 billion to just over $1 trillion, would also be subject to that standard.

But lawmakers and the White House have sought a means to exempt the physician payments from paygo requirements. Congress has acted time and again to protect doctors from pay cuts and would inevitably to so again.

Because of that, many Democrats argue, the fact that the budgetary baseline assumes those cuts and characterizes as a fix as new spending does not reflect reality.

Since when does anything in Washington resemble reality?
The congressional budget resolution contains provisions that originated in the House allowing Congress to pass a physician payment fix without paying for it.

How does one "fix" the payment problem without really, you know, paying for it?

And folks thought Enron had creative accounting. This makes Bernie Madoff seem like a rookie.

Bet you didn't know that in 2008 the IRS collected $194 billion in taxes to fund Medicare but then CMS paid out $391 billion in benefits to Medicare beneficiaries.

Health care reform will be a piece of cake. Just pass the legislation and then don't pay for it.

No problem.
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