April 22—The former chairmen of the bipartisan National Commission on Fiscal Responsibility and Reform have issued a revised deficit reduction plan, which would reduce federal health spending by $585 billion over 10 years. The modified Simpson-Bowles plan includes $65 billion in payment reductions to hospitals, which would affect areas such as graduate medical education, bad debt reimbursement, and payment to rural hospitals.

Other major provisions of the plan released by former senator Alan Simpson (R-Wyo.) and former Clinton White House chief of staff Erskine Bowles include:

  • A permanent fix to the flawed Medicare sustainable growth rate formula for physician payment
  • Medical malpractice reform
  • A gradual increase in the Medicare eligibility age to 67, with an income-related “buy-in” at age 65
  • Simplified cost-sharing for beneficiaries

  • Delivery system and payment reforms included in the plan are designed to give Medicare programs new tools to experiment and improve delivery and payment. Also, as a means to ensure long-term deficit reduction, the proposal seeks to “limit the growth of the net federal commitment to health care at the rate of GDP per beneficiary,” starting in 2018.

    Publication Date: Monday, April 22, 2013