The Obama administration said Monday that it was cutting payments to doctors and hospitals after finding that cost overruns are threatening to use up the money available in a health insurance program for people with cancer, heart disease, and other serious illnesses.
The administration had predicted that up to 400,000 people would enroll in the program, created by the 2010 health care law. About 135,000 have enrolled, but the cost of their claims has far exceeded White House estimates, exhausting most of the $5 billion provided by Congress.
Under a new policy issued by Kathleen Sebelius, the secretary of health and human services, “health care facilities and providers will get paid less” for providing the same services to patients in the federal program, known as the Pre-Existing Condition Insurance Plan.
Congress established the program to provide coverage to people with pre-existing conditions who had been uninsured for at least six months. The program provides a transition to 2014, when most consumers will be able to obtain insurance regardless of their pre-existing conditions.
In a regulation to be published Wednesday in the Federal Register, the administration says that doctors and hospitals must accept the amounts set by the government as “payment in full” for services in the high-risk pool administered by the federal government. Providers can still collect co-payments from patients, but cannot bill them for more than the “cost-sharing amounts” allowed by the government.
The administration said the restrictions were necessary to prevent “irreparable financial harm” to patients, who might otherwise be “forced to pay substantially higher out-of-pocket costs.”
The government will not set payment rates for prescription drugs, organ transplants or kidney dialysis. Officials did not say why those items and services had been exempted.
When the federal program for people with pre-existing conditions ends on Jan. 1, 2014, many of them are expected to go into private health plans offered through new insurance markets being established in every state. Federal and state officials worry that an influx of people with serious illnesses could destabilize these markets, leading to higher premiums for other subscribers.
For this reason, federal and state officials say, they will try to recruit large numbers of healthy young people to buy insurance. Their premiums would help pay for the care of less healthy people.
Source: New York Times, May 20, 2013