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The "physician payment fix," which restores draconian cuts, only brings reimbursements back to abysmal levels.
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Many states might have to restrict enrollments or benefits, scale back reimbursements to health care providers, or shift costs to poor beneficiaries.
As part of the continuing negotiations, federal officials plan to scale back reimbursements to New York, but over a period of several years.
However, rising health care costs have triggered cost-containment measures, and office-based medicine has become less financially attractive for physicians due to frozen or scaled back reimbursement schedules.
Any fixed cost of processing the loan application as well as servicing the loan to take back reimbursement becomes high in relation to the small amount of the loan.
The governor was unable earlier this year to convince a majority in either house to roll back reimbursement rates.
One former Buchanan executive, Salvatore Rosa, told investigators that reimbursements began as far back as 2003.
If the administration lets the latest loophole remain, the costs could become huge, compelling Congress to cut back Medicaid reimbursements.
The shifting gorilla, of course, is Congress; the drug industry fears lawmakers will agree to pay for a Medicare prescription drugs benefit now, in times of surplus, and then cut back on reimbursements when money grows scarce.
Home health companies are known to grow quickly and blow up just as fast when Medicare cuts back on reimbursements.
"Private insurers have cut back their reimbursement, so there's less opportunity to use those payments to cover the losses on Medicare patients," he said.
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