Fiscal Cliff-hanging

News so far good and bad for Medicare, diabetes research

By Bob Woods

The New Year's resolution made by Congress and the White House to keep the nation's economy from tumbling off the so-called fiscal cliff narrowly averted immediate tax increases for most Americans Uncle Sam Cliff Hangerand massive across-the-spectrum spending cuts. As it turns out though, the country is still clinging by its fingertips to the economic precipice because many of the same fiscal debates will be resurrected when federal lawmakers and the Obama administration renew talks around the debt ceiling over the next couple of months. In the meantime, in reviewing the fiscal cliff legislation that was agreed to on January 1, there's a mix of good news and bad news for people with diabetes.

While virtually every sector of the U.S. economy would have been negatively impacted by the cliff dive, healthcare was poised for a huge hit. Fortunately the bill—called the American Taxpayer Relief Act of 2012—blocks a 26.5% cut in Medicare payments to doctors that would have automatically gone into affect on January 2. The $30-billion price tag of that "doc fix" patch, however, is offset by cuts in reimbursements to other Medicare providers over the next 10 years, with hospitals picking up nearly 50% of the tab. Spared are hospitals in rural areas and with less than 100 beds. "That we can at least can keep doctors' salaries stable for at least another year is great, but that's a short-term fix," says Cathy Carver, vice president for planning and advocacy at Boston-based Joslin Diabetes Center. "This just kicks the can down the road."

Because diabetes is largely an outpatient disease, with care primarily taking place in doctor's offices, these cuts will only affect Medicare patients being treated while in the hospital. In the meantime, more and more doctors are opting out of Medicare, leaving seniors, who comprise a substantial portion of the diabetes population, especially vulnerable. "That's a real worry for us," Carver says.

Of immediate concern to Medicare patients with diabetes is a provision in the bill covering testing supplies sold by retail pharmacies. Retail pharmacy-supplied diabetic testing supplies had been exempted from a federal competitive bidding program until 2016, but will now be reimbursed at lower rates starting on April 1. That change is estimated to save the government $600 million, but pharmacist associations argue that the new rates will negatively impact retail pharmacies and their customers. It "would effectively force many community pharmacists to stop providing diabetes test supplies to Medicare beneficiaries," said John Coster, RPh, PhD, senior vice president for government affairs at the National Community Pharmacists Association (NCPA), in a statement issued on January 1.

On a brighter note, the fiscal cliff bill renewed two important special diabetes research programs for another year, keeping their $150 million in annual funding intact. The programs—one for American Indians, the other for type 1 diabetes research—have been in place since 1997 and represent a significant contribution from the federal government to combat, prevent, and cure diabetes.

Nonetheless, diabetes research may not be spared the chopping block once the debt ceiling and sequestration talks resume in Washington over the coming weeks. The fiscal cliff bill merely postponed automatic cuts that still loom and would impact diabetes research at the National Institutes of Health, the National Science Foundation, and other government-funded programs. "We have an enormous research initiative," says Joslin's Carver, "and the discussions about cutting federal programs are very important to us. We're trying to find a cure for diabetes, and it's worrisome."

Bob Woods is a freelance writer based in Madison, Connecticut.

Last Modified Date: December 03, 2013

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