Medicare: The Perpetual Balance Between Performance and Preservation
Journal of Contemporar y
Medicare: The P erpetual Balance Between Performance and Preser vation
Craig B. Garner
Part of the Health Law Commons Recommended Citation Craig B. Garner, Medicare: Th e Perpetual Balance Between Performance and Preservation, 30 J. Contemp. Health L. & Pol'y 279 (2014). Available at: http://scholarship.law.edu/jchlp/vol30/iss2/6
-
Article 6
Follow this and additional works at: http://scholarship.law.edu/jchlp
“Confusion is a word we have invented for an order which is not
understood.”1
Passed by Congress and signed by President Lyndon Johnson into law in
1965, Medicare2 has weathered storms from all directions, growing to be the
preeminent standard for health insurance in the United States.3 The idea of
losing Medicare as a vital public benefit still remains the single greatest fear
with which each passing generation of Americans must contend, and yet,
these challenges over the past fifty years, designed to fortify Medicare’s
foundation and ensure its longevity, continue to take a toll on the program.4
The most recent climate of reform includes changes implemented by the
Patient Protection and Affordable Care Act (“PPACA”).5 The PPACA is
designed to expand coverage for a broader group of people, yet it adds
unprecedented layers of complexity such that it may be but a matter of time
before the confusion experienced by today’s providers proves to be
* Craig B. Garner is an attorney and health care consultant, specializing in issues
surrounding modern American healthcare and the ways in which it should be managed in
its current climate of reform. Mr. Garner’s law practice focuses on healthcare mergers
and acquisitions, regulatory compliance, and counseling for providers in all
matters pertaining to contemporary healthcare in the United States. Mr. Garner is also an
adjunct professor of law at Pepperdine University School of Law, where he teaches
courses on Hospital Law and the Patient Protection and Affordable Care Act.
Medicare’s undoing altogether. The decades of trial and error upon which
health care in the United States have been built, at least from the point of
view of both physicians and lawmakers who watch from the sidelines, may
give way to confusion and disruption industry-wide as a result of newly
enacted regulations.6
Today, Medicare is the preeminent standard for health insurance in the
United States, expanding despite fluctuations in the economic, political and
social climate since its initial passage. However, in its struggle toward
sustainability, the Medicare Program must understand the resulting
consequences as it distances itself further and further from its original
simplicity in 1965.7
Medicare’s original cost-based system gave way in the 1980s to the
Prospective Payment System (“PPS”),8 an event noted by many with great
concern.9 Under PPACA, the Medicare system takes another monumental
step as it incorporates elements of performance into the PPS.10 Formulaic
and confusing, Medicare’s recent approach to provider reimbursement has
been likened to Finnegan’s Wake by James Joyce,11 a book that some critics
6. Compare Herrymon Mauer, The M.D.’s Are Off Their Pedestal, FORTUNE MAG. 138, Feb. 1954, with Kevin Vachon, Confused and Disengaged About Health Care,
PORTLAND DAILY SUN (May 15, 2013, 4:04 PM), http://www.portlanddailysun.me
/index.php/opinion/columns/9355-confused-and-disengaged-about-health-care.
7. In Medicare’s early years, “unrestricted cost reimbursement became the modus
operandi for financial American medical care.” Rick Mayes, The Origins, Development,
and Passage of Medicare’s Revolutionary Prospective Payment System, 62 J. HIST. MED.
& ALLIED SCI. 21, 24 (2007). According to Sheila Burke, Chief of Staff of Former
Senator Robert Dole: “Medicare’s traditional model of cost reimbursement was insanity.
On the face of it, it encouraged people to do more; it paid them to do more and not in any
particularly rational way.” Id. at 22 (emphasis in original).
8. First, the Tax Equity and Fiscal Responsibility Act (“TEFRA”) directed the
Secretary of Health and Human Services to develop a proposal for legislation that would
provide for reimbursement “on a prospective basis.” Pub. L. No. 97-248, § 101(c), 96
Stat. 324, 335 (1982). The following year, Congress created the “Prospective Payment
System” (“PPS”), which hospitals first became subject to on October 1, 1983, and was
phased in over a period of four years. Alvarado Cnty. Hosp. v. Shalala, 155 F.3d 1115,
1119 (9th Cir. 1998) (citing 42 U.S.C. § 1395ww(d)(
1
)(A)(i) (2012)).
9. See, e.g., Ross Mullner & David McNeil, Rural and Urban Hospital Closures: A
Comparison, 56 HEALTH AFFAIRS 131 (1986).
10. See, e.g., Matthew J. Press, Limits of Readmission Rates in Measuring Hospital
Quality Suggest the Need for Added Metrics, 6 HEALTH AFFAIRS 1083 (June 2013).
11. See, e.g., Catholic Health Initiatives Iowa Corp. v. Sebelius, 841 F. Supp. 2d 270,
270, 270 n.1 (D.D.C. 2012), rev’d by 718 F.3d 914 (...truncated)