During oral arguments at the Supreme Court in the case against the federal health reform law, lawyers for the Obama administration filed papers warning that striking down the entire overhaul would cause “extraordinary disruption” to Medicare’s payment systems, the AP/San Francisco Chronicle reports.

Medicare processes 100 million claims monthly from hospitals and other health providers. The papers state that the health reform law contains 20 separate sections that altered the payment process for Medicare transactions. Reversing the law’s payment changes would raise many legal and logistical questions, such as how the government would treat payments made over the last two years and whether providers could seek refunds for payment cuts made under the overhaul.

The health reform law also completely revised the payment process for Medicare Advantage plans, according to the AP/Chronicle. Striking down the overhaul would cause many elderly U.S. residents to lose new benefits, such as prescription drug discounts aimed at closing the “doughnut hole” and no-cost preventive services.

Former CMS Administrators Weigh In

Former CMS Administrator Don Berwick said, “Medicare cannot turn on a dime,” adding that he “would not be surprised if there are delays and problems with payment flow” if the law is revoked. Berwick noted that moving forward would be complicated because the overhaul’s new payment formula that focuses on quality rather than quantity already has been incorporated into some payment policies.

Meanwhile, former CMS Administrator Tom Scully does not anticipate any major short-term problems for health plans or providers. “The idea that Medicare Advantage plans would shut down and patients would be thrown into the street is just people making up arguments to stir the pot,” Scully said (Alonso-Zaldivar, AP/ San Francisco Chronicle, 5/3).