MEDICARE UPDATE….A reader who works for the Department of Health and Human Services emails to tell me that the government’s plan to shut down Medicare payments for the last nine days of the federal fiscal year isn’t as sinister as it seems:

HHS is actually bringing a new financial system online (UFMS), to replace and modernize all the old clunky legacy systems the different HHS branches operate on. That is a chaotic process that involves shutting down the old system and bringing the new one online. This is why no one will be reimbursed for those off-days. We’ve been notifying everyone we do business with about that shutdown since it was decided back in March. It’s painful, but unavoidable unless we want to keep the old financial systems forever, and it’s much better to do it now than to try to make it happen right in the middle of a fiscal year.

This sounds disturbingly plausible. Unless I hear some convincing evidence to the contrary, I’m hereby retracting my earlier outrage and declaring this a nonevent.

UPDATE: OK, I take it back. It appears that the 9-day hold was mandated by the Deficit Reduction Act of 2006 as a way of saving money. Section 5203 is the culprit. Page 60 even spells out the exact savings: $5.2 billion in FY2006, followed by -$5.2 billion in FY2007.

Consider my outrage back in force. These guys are idiots.

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