Tom Price’s Bill Delays Medicare Cuts in Rural Areas

Long live the days when Social Security was the third rail of American politics. It has been replaced by a program that is even more sacrosanct and impervious to reform: Medicare.

On Tuesday, the U.S. House of Representatives passed the PADME Act sponsored by Georgia Rep. Tom Price (R-6). PADME delays cuts to reimbursement rates for rural suppliers who sell durable medical equipment (wheelchairs, canes, blood sugar monitors, etc.) to Medicare eligible seniors. Rep. Price, a former orthopedic surgeon, released the following statement:

This legislation represents an ongoing, bipartisan commitment to ensuring Medicare beneficiaries continue receiving critical care provided with durable medical equipment – particularly those Americans living in rural areas who would be disproportionately harmed by cuts in reimbursements. This delay should give policymakers additional time to come to a consensus on a more long-term solution. Every effort must be made to protect access to quality health care for seniors.”

Specifically, PADME prevents the Center of Medicare Services from extending its competitive bidding program for durable medical equipment to rural and low population areas until October 2017. The competitive bidding program requires equipment suppliers to compete against each other for the right to serve Medicare patients, significantly decreasing the reimbursement rate they receive from Medicare. The program is already operational in the 100 largest metropolitan areas and currently affects around 58 percent of persons who are Medicare eligible.

PADME was widely supported with many trade organizations representing medical suppliers coming out in favor of it and 121 bipartisan cosponsors signing on in the House. Despite widespread support, the bill raises questions about how Congress will deal with the struggle between increasing access to healthcare and managing a bloated federal budget. (Hint: They aren’t)

Government spending on Medicare is unsustainable and lawmakers have yet to seriously address the issue by either cutting costs or raising revenue. The Congressional Budget Office expects Medicare costs to increase from $632 billion to $1.1 trillion over the next 10 years, raising its share of federal budget to 15.2 percent. Although an improving economy has slightly improved its outlook, Medicare trustees expect the program to be insolvent by 2034. Expanding the competitive bidding program was one of the ways that the federal government was trying to improve Medicare’s fiscal outlook.

However, by passing PADME, Rep. Price and his supporters were recognizing that cutting Medicare costs will inevitably harm seniors, particularly those in vulnerable rural areas, and that some cuts may not be worth the long term costs. Rural healthcare has long been a problem, with nonurban areas having fewer doctors per capita and a lower quality of care. Rural Medical suppliers already receive lower profits. Cutting reimbursement rates could cause many of them to leave the market for the cities and deny rural seniors access to the medical equipment that they need.

Fiscal sustainability and improved healthcare access in rural areas need not always be in conflict. Some medical instruments, such as home respirators, can improve a patient’s health and prevent hospital trips that end up being more expensive in the long run. Proactive care was the logic behind Medicare Part D, the prescription drug benefit signed by George W. Bush. By improving access to pharmaceuticals, patients would avoid ailments that require more expensive treatments, saving money in the long run.

PADME delays the expansion of the competitive bidding process for over a year. Perhaps Congress can use this time to find a solution that both addresses Medicare’s financial problems and improves proactive healthcare in rural areas. But then again, Medicare is the third rail of politics. Portraying the other party as trying to gut benefits or deny the elderly access to healthcare has always proven to be winning strategy. So perhaps not.

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