As the debt reduction “super committee” – tasked with finding at least $1.2 trillion in deficit reduction – began its formal meetings last week, Democrats on the House Ways and Means Committee were circulating a document containing more than $500 billion in potential cuts to the Medicare program over 10 years. The leaked document – which the committee stressed was for internal discussion only – contains a variety of controversial reductions in addition to potential industry reaction to such cuts. Several notable provisions include:

  • $125 billion in savings by gradually raising the age of Medicare eligibility to 67;
  • $28 billion in savings by freezing annual Medicare payment updates to post-acute providers for two years, including home health agencies, skilled nursing facilities and inpatient rehabilitation facilities;
  • $15 billion in savings by cutting reimbursements for graduate medical education, impacting teaching hospitals;
  • $24 billion raised by implementing new deductibles and co-pays for clinical laboratory services;
  • $62 billion in savings by eliminating the rural hospital payment add-ons, impacting sole community hospitals, critical access hospitals and Medicare dependent hospitals, bringing them into the Medicare inpatient prospective payment system (IPPS); and
  • $3 billion in savings by accelerating the PPACA-mandated rebasing of payments to home health agencies.

The Ways and Means Committee document can be found here.