Which Health Care Option for Reducing the Federal Deficit?

Which Health Care Option for Reducing the Federal Deficit?

This article analyzes one of the 18 health care options noted in the Congressional Budget Office ‘Options for Reducing the Deficit: 2017 to 2026’ report for ways to reduce the federal deficit.

This article is presented from the perspective of a private long-term care facility and attempts to evaluate the effects implementing said option would have on the organization. What do Medicare and Medical spending contribute to the federal deficit?

According to, "CBO - Congressional Budget Office" (2016), Net mandatory outlays for Medicare and Medicaid, totaled an estimated $890 billion, roughly one-quarter of all federal spending & 5.0 percent of GDP in 2015. People enrolled in Medicare and Medicaid continue to rise. Over the next 10 years, enrollees from the baby-boom generation is expected to increase about one-third. Most of the projected spending in the major federal health care programs is for people age 65 or older” (Health Options).

At first glance, I wanted to see which of the proposals would offer the biggest return in the shortest time? The greatest proposed health care option for federal deficit reduction could come from Repealing All Insurance Coverage Provisions of the Affordable Care Act (Option 4). This option is estimated to reduce the federal deficit by $1,236B in nine years. However, this option would leave millions without insurance coverage. An unrealistic and risky proposition. What else could be done with less risk?

Perhaps, there is an option to provide less deficit savings but with less risk and a greater chance of implementation success? After all, some small reduction that can be achieved is better than a big dream never realized. I believe the option to reduce Medicare’s coverage of bad debt (Option 10) to less than 25 percent is very doable without catastrophic loss of service to patients. An effective and efficient systematic approach to successfully recover Medicare/Medical over payments before they turn into bad debt (Identified in notes of Figure 1) is a waste reduction effort with plenty of best practices available.

Implementing existing technologies and innovations for Medicare and Medical payment systems may help organizations meet the 60-day repayment rule within the ACA and potential legal liability under the U.S. False Claims Act. (Mortell, T. J., & Muller, M. (2018).

Additional debt recovery is lost when health care organizations go bankrupt and Medicare and Medical over payments are not collected/returned. According to, “Guice, M. (2017), In healthcare bankruptcies, the automatic stay is not always applied consistently, especially for the largest creditor in these cases, the government. The Government could work to improve the process for collection applied to debtors with the largest outstanding debt based on the equitable doctrine of recoupment (Government Recovery of Medicare Overpayments and the Automatic Stay).

In conclusion, reducing Medicare’s Coverage of Bad Debt can help to cut the federal deficit by $30.6B by 2026 with minimal effect on a long-term care or other health care facility or services. Organization could work within any changes made to payment and or debt collection procedures. For example, new systems or rules may require workforce development, technology or management improvements. Reducing or eliminating Medicare over payments while returning over payments more efficiently can reduce bad debt recovery cover within the federal deficit and that helps everyone.


References
CBO - Congressional Budget Office (2016). Retrieved from https://www.cbo.gov/publication/52142

GUICE, M. (2017). Government Recovery of Medicare Overpayments and the Automatic Stay. Emory Bankruptcy Developments Journal, 34(1), 127–163.

Mortell, T. J., & Muller, M. (2018). Medicare’s 60-Day Repayment Statute: When Failing to Return an Over payment Becomes a False Claim. Advocate (05154987), 61(1), 28–31.