The Senate Finance Committee last week passed a measure that would increase Medicare payment rates to contracting managed-care plans in rural areas by freezing payment rates to plans in high-cost, primarily urban markets.
The panel also passed several restrictions on Medicare-contracting health plans, mimicking similar legislation in the House.
The freeze came as part of an amendment offered by Sen. Charles Grassley (R-Iowa) that would set a minimum payment rate equal to about 85% of the U.S. average rate. In 1997, that average is about $397 per month per enrollee, Grassley said.
To pay for the increase in payment rates in rural areas, rates for plans in traditionally high-payment areas would be frozen for five years beginning in 1998. If that freeze does not produce sufficient savings to pay for the new payments, the floor would be dropped below the 85% threshold. Now, Medicare pays some managed-care plans in low-cost rural areas as little as $250 per month per enrollee, while some plans in high-cost urban areas get more than $750.
Meanwhile, over the past two weeks committees in the House and Senate have passed a variety of measures that would place restrictions on Medicare HMOs.
The House Commerce Committee, led by Reps. Greg Ganske, M.D. (R-Iowa), Tom Coburn, M.D. (R-Okla.), and Charles Norwood (R-Ga.), a dentist, passed an amendment that would allow doctors and patients to make the final decision on how long a hospital stay should last.
It also passed measures that would:
Bar HMOs from enforcing so-called "gag clauses" on physicians.
Force HMOs to pay for emergency room visits if a "prudent layperson" would have reasonably believed the visit was necessary.
Keep HMOs from discriminating against a class of health providers based on the type of license held. For example, if a plan pays for treatment of a stiff back, it cannot bar chiropractors who are qualified to treat the condition from its network. The measure does not, however, place requirements on the number of each type of provider a plan must have in its network.
Change the appeals process when a beneficiary is denied care. Appeals must be reviewed by a "physician with appropriate expertise." The beneficiary can also go outside the plan for a review if necessary.
The Senate Finance Committee passed many of the same measures in its plan.
Representatives of the managed-care industry said plans already self-impose many consumer protections, and the measures passed by Congress are largely unnecessary. They also said the restrictions would raise operating costs of plans, hindering their efforts to implement utilization review and clinical guideline programs.