Redux

Of the $491 billion in projected cuts:

* $118 billions results from setting payment rates to MA providers on the basis of the average of the bids submitted by those providers in each market...these are the guys who have been overcharging by an estimated 15%. Will it impact services? Probably not. The contracts just wont go the guys who have been overcharging the most..and others will step up.

* Another $192 billion are not really cuts...but reductions in the annual rate of increase for most services in the basic fee-for service program....starting in the out years and based on assumptions of savings through greater efficiencies and fraud detection. A realistic number...probably not. But in any case, the legislation stipulates that any efficiency improvements can not be based on modifying (reducing) eligibility or benefit levels.