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Cuts to Some Medicare Payments Provide Offsets for 'Doc Fix'

An additional $1.8 billion would be saved by further reducing reimbursement for multiple therapy procedures when performed on the same day. And Medicare would save $800 million by adjusting payments to account for more efficient use of medical imaging equipment.

The fiscal cliff deal also would rescind all unobligated funds for a program in the health care law to help set up consumer-oriented nonprofit health plans. The bill would create a contingency fund of 10 percent of current unobligated funds to help co-op plans that have already been approved. Savings from that provision amount to $2.3 billion.

Under the bill, the Medicare Improvement Fund would be eliminated, saving $1.7 billion. In addition, insurance companies competing in Medicare would be affected. A “coding intensity adjustment” to payments to Medicare Advantage plans would cut them by $2 billion.

The bill also would extend several Medicare payment policies that expired Dec. 31. That includes continuing for one year a process allowing exceptions to a per-beneficiary cap on payments for outpatient therapy services provided outside of hospitals. It also extends the cap for therapy services received in hospital outpatient departments for one year.

Additional payments for some ground ambulance services would be continued for one year, and those for some air ambulance services through June 30, 2013.

The “physician work index” which accounts for regional differences in the cost of resources needed to provide Medicare physician services would be continued for one year.

A program that allows Medicaid to pay Medicare Part B premiums for some low-income beneficiaries would be extended for one year, as would the program that allows some low-income beneficiaries to maintain Medicaid coverage as they transition to employment.

John Reichard contributed to this story.

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