Saving Yourself from Medicare Cut

Guest Contributors Paul Burke and Jan Kletter, MD

 

People know that Obamacare changed private insurance. It also changed Medicare, to save money.

 

Seniors with both Medicare and private health insurance need to think about dropping Medicare Part B, which covers doctors, outpatient procedures and equipment, but also imposes restrictions. This is a serious decision.

 

Medicare is changing the way it pays hospitals and physicians who agree to work together in alliances. These alliances are known as accountable care organizations. Essentially the alliance keeps half the savings when it cuts the care of Part B patients: it gets more money for doing less. Therefore Part B patients with complex medical problems may not get the type of care that was available in the past, and that private insurance still covers.

 

Additionally, hospitals can get hit with a penalty imposed by Medicare when patients have too many hospital stays. Medicare rates hospitals on the number of Part B patients admitted twice in 30 days, even if the stays are unrelated and the hospital is not at fault. Every readmission above average, in any of six categories, incurs a penalty of $30,000 to $265,000, far more than Medicare pays to treat a patient in the first place. The penalties are supposed to encourage better care; the side effect is to discourage certain hospital stays. Instead, hospitals use other resources to keep complex Part B patients, with above-average chance of readmission, out of hospital beds.

 

The American College of Surgeons warned Medicare on June 14 about "the potential that these hospitals will decrease their care for such patients, thereby creating an access issue." Hospitals can afford to avoid these Part B patients, because Obamacare sends them many new private patients. The question is whether or not this is going to lead to better outcomes for patients.

 

Part B premiums cost $1,300 to $4,000 per person per year. Dropping Part B puts that money back in the patient's pocket. It also shields patients from the new restrictions on Medicare coverage.

 

According to the respected Guide to Health Plans, most federal retirees will save money by dropping Part B and keeping their federal health plan. "Medicare Part B will rarely save you nearly as much money as you spend on the Part B premium... Medicare Part B is of limited value to someone already covered by a good health plan."

 

Patients need to be certain of their own situation, but many have already bypassed Part B. Skipping it makes sense for many more, now that Medicare restrictions are in place.

 

Private insurers also want to cut care; Medicare has gone further, since it has more power. To drop Part B, patients file form 1763 with Social Security. They can re-enroll online the first three months of each year, which would take effect in July, with a 10 percent higher premium for each year without Part B. As the Guide to Health Plans says, "Thus, dropping Part B is not an irrevocable decision, and later rejoining Part B need not be highly costly."

 

It is understandable why Medicare has these restrictions. Seniors who get less treatment and die save money for both Medicare and Social Security. These programs are under intense pressure to cut costs. Patients who can pay doctors' bills with other insurance will avoid Medicare's reductions in care by dropping Part B.

 

Paul Burke is a retired federal researcher who manages a watchdog site, Globe1234.com

Jan Kletter currently practices general surgery in West Virginia.

MEDICARE KILLS

[Guest Contributor - Paul Burke]
Photo of Paul Burke's Father - age 98

Ironically after all the effort to expand coverage, Obamacare pays doctors to deny care.

In the first place doctors who advise Medicare patients against treatment can sign up to keep half the savings as a kickback.

Second, hospitals which talk Medicare patients into hospice, or out of coming back to a hospital, keep as much as $265,000 for each readmission they avoid.

With less treatment, seniors die, saving money for both Medicare and Social Security. Hospitals in Maryland, where Medicare and Social Security have their head offices, are exempt. So are military hospitals, where members of Congress go.

Medicare has become adversarial, because doctors and hospitals get these kickbacks from cutting care. As long as Democrats refuse all amendments of Obamacare and Republicans insist on complete repeal, the kickbacks will continue, and patients need to protect themselves by avoiding doctors who sign up for kickbacks, and by hiring a nurse-advocate in the hospital, just as we hire a lawyer in court.

My father was 98, active, and articulate about choosing life, in five languages. He used a wheelchair, worked out twice a week with a personal trainer, read the daily paper and the Atlantic, enjoyed restaurants and the opera. Before retiring he managed the Latin American business operations of Time-Life magazines and books.

He was fragile, and by some standards not so old. Many people live and contribute past 100. Yet hospitals urged him to give up the life he enjoyed. They tried to talk him into stopping dialysis, which would have meant death in a week. They urged palliative care and a "do not resuscitate" (DNR) order, contrary to his advance directive. They kept him without food for three days because of suspected swallowing problems. They started blood thinners, which gave them a reason not to operate to drain his chest. They convinced his assisted living to evict him unless he went on hospice and gave up dialysis. He refused.

His doctors had not signed up for kickbacks, but they did face Medicare penalties if above-average numbers of patients returned to a hospital within 30 days. A readmission penalty after congestive heart failure, which he had, cost the hospital $35,000. After knee or hip replacement it would cost $265,000. They paid no penalty when he died. We heard, and anyone who might come back in 30 days starts to hear, "Not a good candidate for treatment... Side effects can be bad... Palliative care... Hospice... DNR." We knew nothing of readmission penalties and did not hire an advocate. The readmission penalties propelled both the refusal to treat him and the pressure on his home to evict him, which left him in despair, and in two days he died.

Hospitals cannot bill patients or other insurance for readmission penalties, so they face draconian costs for treating anyone who might come back in 30 days. We all know readmissions save lives. Dr. Hawking, Senator Byrd and President Mandela were readmitted when needed. But Senator Byrd used an Army hospital, exempt. Medicare staff and retirees use Maryland hospitals, also exempt.

A penalty for readmission can be a death penalty when it drives hospitals to avoid treating you. The American College of Surgeons has warned about "the potential that these hospitals will decrease their care for such patients, thereby creating an access issue" (letter to Medicare 6/14/13).

Medicare recommends death penalties in nursing homes too, for excess rehospitalizations. If that penalty is adopted, fragile patients would not be accepted into nursing homes, and if already there, would be urged to forego needed hospital stays.

Four published studies, from Veterans Affairs, New England Journal of Medicine, New York Hospital Association, and Medicare's own contractors at Yale, show as you would expect, that when fewer patients return to hospitals, more patients die. Three other studies, from an Oklahoma hospital, Kaiser, and Healthgrades, show that patients with palliative care or DNR die sooner than they would otherwise, so signing up patients leads to more deaths and fewer readmission penalties.

Medicare knows its penalties can lead to more sickness and death, "We are committed to monitoring … increased patient morbidity and mortality" (Federal Register 8/31/12 p. 53376). Its contractor has already found higher deaths. Any NIH study would monitor deaths and stop the experiment when death rates rose. Medicare does not.

Medicare is explicit that "end-of-life/palliative care" is an "efficiency" which should increase kickbacks to doctors (2009 p.6). MedPAC, a Congressional agency, recommends "hospice use and the presence of advance directives" as methods to decrease rehospitalizations (2012 p.195). MedPAC did the original unpublished 2005 study justifying readmission penalties. They said 76 percent of readmissions within 30 days were "potentially preventable," but the study was based on experimental software without clinical reviews (2007 p.108).

If you think 20%-55% of your care is unnecessary, you will do fine, since kickbacks are designed to cut your care that much. Be aware that quality controls are minimal. Or if you have no interest in life, the system will oblige. My mother had cancer and died on hospice at age 88. But people deserve to choose. Seniors have paid for insurance and count on treatment without the government micro-managing hidden penalties and kickbacks to sway professionals against their wishes.

With research you can avoid doctors who sign up for kickbacks. Readmission penalties are harder to avoid. Your own doctors do not manage your hospital stay. Staff doctors do, and they need the hospital to be financially strong. Patients need to hire independent expertise during hospital stays, to get full information. We cannot trust hospitals which face $35,000-$265,000 penalties.

A bipartisan majority should repeal the penalties. In the meantime Medicare needs to exempt more patients, as it now exempts people under 65, or without Part B, or in Maryland. It should exempt patients over 95 or 100, since they are most at risk of improper pressure to die, and they are too few to affect the statistics. Medicare should also offer demonstration programs to exempt patients who pay an extra premium, or patients willing to have a copay for every hospital stay. Currently only the first stay in each 60 days has a copay, of $1,200. These alternatives reduce Medicare costs, while leaving hospitals willing to readmit when needed.

Paul Burke is a researcher who has analyzed data for HUD, Congress' Office of Technology Assessment, and the UN Development Programme. He manages a watchdog site, Globe1234.com, and is not connected to the health care industry. He has declined Medicare for himself to avoid its interference in his healthcare.