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The DRA means big changes are ahead for providers

Health Care Auditing Strategies, June 1, 2006

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by John Reiss, Esq., partner at Saul Ewing, LLP, in Philadelphia

The Deficit Reduction Act of 2005 (DRA) has major consequences for all providers of healthcare services and products paid for by Medicaid. In brief, the act means that states are allowed to reduce benefits and impose additional cost-sharing and premiums on patients. As a result, providers will face more uninsured or underinsured patients.

Higher cost-sharing will likely lead Medicare recipients to delay initial treatment and increase the likelihood that they will become sicker and require more expensive care later on-and that the more expensive care will be underreimbursed. These results will be aggravated because the federal government is restricting the taxes states may levy to match federal financial participation.

State Medicaid programs will have additional federal funding, a stronger incentive to root out fraud, and will probably require providers to adopt more integrity activities. These activities should lead to appropriate Medicaid spending and will likely increase providers' costs of compliance. Finally, under the act, drug manufacturers will receive less money.

This is an excerpt from a member only article. To read the article in its entirety, please login.

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