NCPA - National Center for Policy Analysis

Expert Recommends Increasing Medicare Payments

June 3, 1999

The chairwoman of the Medicare Payment Advisory Commission says she now favors increasing Medicare payments for certain nursing home and hospital services. Gail R. Wilensky, who ran the Medicare program under President George Bush, has concluded that fund cuts made in the 1997 budget appear to be harming the quality of care for some patients.

Wilensky is said to be respected by lawmakers in both parties for her technical knowledge of the program. As recently as three months ago, she said she had not seen enough evidence to justify increases in Medicare payments.

  • Medicare cuts accounted for $116 billion of the $127 billion that was to be saved over a five year period under the 1997 agreement.
  • The savings were a major factor in helping balance the federal budget in 1998.
  • Wilensky said she was recommending "targeted and limited changes" in the Balanced Budget Act -- not a wholesale revision or repeal of its Medicare provisions.
  • Specifically, she wants Congress to provide more money for physical therapy -- eliminating what she described as an arbitrary limit of $1,500 a year in Medicare physical therapy payments.

In addition, she wants to increase payments to nursing homes for patients who need the most costly and extensive care. Also, she tended to agree with hospitals that say Medicare is paying too little for outpatient services.

She did not, however, endorse pleas by teaching hospitals for more money. Nor did she endorse pleas of home health agencies that claim beneficiaries' access to home health care has been impaired by the Medicare cuts.

She warned against undoing "in haste" the provisions of the Balanced Budget Act.

Source: Robert Pear, "Chief of Panel Seeks Increase for Medicare," New York Times, June 3, 1999.


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