MINNEAPOLIS, June 12, 2009 - The MMA sent a letter to Congressional leaders Thursday calling for them to make Medicare payments equitable between states as they consider health care reform proposals this summer.

 

The MMA joined the Minnesota Council of Health Plans and the Minnesota Hospital Association in cosigning a letter to committee leaders who will be considering health care reform proposals this summer.

 

The five committees were the House Ways and Means Committee, the House Education and Labor Committee, the House Energy and Commerce Committee, Senate Finance Committee, and the Senate health Education and Labor Committee.

 

Fix payment

The letter calls for Congress to fix Medicare’s broken payment system, which doesn’t cover the cost of caring for Medicare payments.

 

For example, the Minnesota Hospital Association’s analysis of 2007 hospital Medicare payments versus actual costs of providing care to Medicare patients, showed a continued increase in Medicare payment shortfalls, from -$421 million in 2004 to -$617 million in 2007.

 

Physician payments have failed to keep up with the cost of operating a practice. Medicare physician rates are slated to be cut by 21 percent in 2010 and will reach a cumulative total cut of 40 percent by 2016 – a $2.5 billion hit to Minnesota alone, while practice costs over that period are expected to rise by nearly 20 percent.

 

 

The letter also calls for Congress to make Medicare payment more equitable. Right now it is the case that states, such as Minnesota, which provide better care get paid less than states that provide lower-quality care.

 

For example, the Agency for Healthcare Research and Quality ranks Minnesota No. 1 in terms of providing quality care. However, Medicare’s payment rates to Minnesota providers are among the lowest in the country.

 

The letter says, “Hospital and physician spending should be reduced in areas of the country that exceed a certain threshold where per patient spending is compared to the national average. Benchmarking to a national average and decreasing hospital and physician payments to realign per patient spending to a national standard will, over time, reduce geographic disparities.”