AACU News & Notes

Executive Order to Improve Medicare

posted: October 10, 2019

Ensure fee-for-service is not “advantaged or promoted”

President Trump signed an executive order Oct. 4 to strengthen Medicare. Asserting that Medicare for All proposals are a “threat like never before” the order reads, “Instead of ending the current Medicare program and eliminating health choices for all Americans, my Administration will continue to protect and improve Medicare by building on those aspects of the program that work well, including the market-based approaches in the current system.”

The order details several actions that will be taken by the Department of Health and Human Services and the agency that administers the Medicare program, including:

  • Outline an approach to change Medicare fee-for-service (FFS) reimbursement to more closely align with Medicare Advantage (MA) payments. About a third of Medicare beneficiaries receive benefits through MA.
  • Transition Medicare FFS toward market-based pricing via shared savings and competitive bidding.
  • Propose regulations that reduce burdens on providers and reimburse services based on the time spent with patients, not the provider’s professional qualifications.
  • Remove barriers that keep some providers “from practicing at the top of their profession.”
  • Create a payment model that adjusts MA benefits to include telehealth services and allow beneficiaries to share savings generated via rebates.

The executive order did not include a provision to implement the administration’s proposed international price index to reduce drug costs in Medicare, an idea that has generated bipartisan interest. House Speaker Nancy Pelosi proposed a similar model that would cap drugs’ prices at 1.2 times the average selling price in Australia, Canada, France, Germany, Japan, and the U.K.

The AACU website addresses the organization’s previous comments and positions on these issues.

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