HCFA and managed-care plans are again sparring over who should pay to educate Medicare beneficiaries about the new Medicare+Choice program and the cost of that education as a Senate committee prepares to address the issue this week.
The new Medicare+Choice program was created as part of last year's balanced-budget law. It is designed to give seniors a menu of choices, including traditional Medicare fee-for-service, HMOs, provider-sponsored organizations, medical savings accounts and preferred provider organizations.
For fiscal 1998, which ends Sept. 30, HCFA will spend about $114 million to inform seniors about the new options available under the program (See chart). Of that, $95 million will be collected from Medicare health plans, with charges based on their Medicare enrollment. The remainder will come from HCFA's general budget.
The $95 million was less than half the $200 million called for under the balanced-budget law. In the subsequent appropriations bill, Congress reduced the funds after managed-care plans argued they were being unfairly required to pay for an education campaign for all 39 million Medicare seniors even though they currently enroll less than 15% of all beneficiaries.
Since last year's battle, HCFA has announced it will delay the release of a handbook with comparative data on all health plans available in a given area. Instead, HCFA will roll out the handbooks only in a five-state test region later this year. If all goes well, more states will gradually be added to the program during 1999.
It also appears there will be fewer options than Congress originally envisioned. HCFA said it has received only two insurer applications for PSOs, one for a new PPO and none for MSAs.
HCFA also announced it would not include Medicare supplemental insurance policies in the comparative data that all seniors will eventually receive.
All this has led members of Congress and managed-care groups to question how HCFA has spent the $95 million allotment, who should pay for education and what level of funding is needed.
Earlier this year, the House Appropriations Committee set HCFA's fiscal 1999 allotment at $95 million.
The Senate Appropriations Committee is set this week to take up its own bill, which will include beneficiary education funds. However, the level of funding is still being considered, according to GOP aides.
Health plan representatives say the Senate should reduce HCFA's funds below $95 million until HCFA can prove that level of funding is necessary.
"We're concerned about the amount of money (HCFA) wants now that the handbooks are not going out to everyone (and) will not include comparative data on Medigap policies, and most seniors won't have any new options," said Elise Gemeinhardt, vice president of federal affairs for United HealthCare Corp.
HCFA has "substantially overestimated the cost of implementing the information activities," said Julie Goon, vice president of government affairs for the American Association of Health Plans.
Michael Hash, HCFA deputy administrator, countered that a $95 million education budget for fiscal 1999 "would result in an inadequate education campaign."
HCFA is requesting $150 million in managed-care user fees for fiscal 1999.