First this…

WASHINGTON, July 16 � The Bush administration says it plans sweeping changes in Medicare payments to hospitals that could cut payments by 20 percent to 30 percent for many complex treatments and new technologies.


Medicare pays more than $125 billion a year to nearly 5,000 hospitals. The new plan is not expected to save money, but will shift around billions of dollars, creating clear winners and losers. The effects will ripple through the health care system because many private insurers and state Medicaid programs follow Medicare’s example.

Okay, so there’s a good reason for this, right? We did thorough research and are making the necessary adjustments because of it, yes? Well, sort of…but here’s where it gets really strange/interesting/sad.

Because yet again, we find a variety of the “no-bid” contract we’ve become accustomed to from this administration. However, this time we paid a company (3M) to look at our current Medicare system and see if their own billing technology could help make the system run smoother.

Yes, you read that right. We paid a company to investigate their own software’s usefulness for the billions of Medicare payments that are processed each year. Anybody want to guess what they found?

This is laughable. Check out this logic from 3M:

Richard F. Averill, research director of 3M Health Information Systems, said the sole-source contract was justified and denied that his company had a conflict of interest. As an inventor of the 1983 payment system, Mr. Averill said, he and his colleagues at 3M know more about it than their competitors.

Moreover, Mr. Averill said in an interview: “The contract required us to use the 3M system in our analysis. There was no evaluation of alternatives.�

My friends, these are truly “amazing” times.

Oh yes, and one last thing…this move has the potential to drive up healthcare costs.

When hospitals lose Medicare revenue, they often seek higher reimbursement from private insurers. J. Brian Munroe, vice president of WellPoint, one of the largest private plans, said he feared that the Medicare changes “will introduce a significant amount of disruption to the commercial health insurance marketplace, driving up health care costs and causing marketplace confusion.�

Good times.

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