Fiscal cliff healthcare policy fix: good for rural patients and taxpayers

Published: Thursday, March 14, 2013 at 09:32 AM.

Rarely do federal lawmakers come upon a policy that can expand access to critical health care services and simultaneously save taxpayers money.

But according to a new report from the Congressional Budget Office, a tweak in the way Medicare pays for certain kidney disease drugs could do just that - preserving the availability of crucial treatments to rural patients and saving the program billions.

At issue is Medicare's handling of a few "oral-only" dialysis medications designed for end-stage renal disease, the most severe version of chronic kidney disease.

In 2011, Medicare switched to a payment system that reimbursed for all dialysis-related treatments in one "bundled" rate. Instead of paying prevailing market prices, the government opted to compensate health care providers according to a formula.

But the Centers for Medicare and Medicaid Services - the government agency that oversees the program - decided to exempt certain oral dialysis medications from the bundle through 2014. January's fiscal cliff deal extended the exemption through 2016.

Instead, those drugs will continue to be dispensed by local pharmacies through Medicare Part D, the prescription drug benefit.

That's the right call. Setting appropriate compensation is a particularly time-consuming and complicated task. It requires a remarkable volume of medical data. If officials had simply thrown the oral dialysis treatment into the price-control bundle, they almost certainly would have set compensation too low.



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