The state of Wisconsin has gone to federal court to try to get the attention of Congress.
The state is suing HCFA over geographic disparities in Medicare payments for managed-care plans, which shortchange beneficiaries, according to Wisconsin's attorney general's office.
With a lawsuit filed March 15 in U.S. District Court in Milwaukee, Wisconsin became the second state to take HCFA to court over the issue. Minnesota filed suit last year (Nov. 22, 1999, p. 24).
"(Wisconsin's) parallel suit . . . certainly supports both the political and legal agenda on the issue," said Peter Wyckoff, executive director of the Minnesota Senior Federation-Metropolitan Region, which is a co-plaintiff in the Minnesota lawsuit.
But Wisconsin officials know they will need more than just the attention of a federal judge on this issue.
"We hope that in the bigger picture that Congress also pays attention to the argument being advanced here," said Jim Haney, a spokesman for James Doyle, Wisconsin's attorney general.
The Balanced Budget Act of 1997 created the Medicare+Choice program. Congress sets the payment formula HCFA uses, so it would take an act of Congress to make changes. The formula sets rates based on historic medical costs in an area.
Wisconsin's lawsuit, like Minnesota's, alleges the payment formula unfairly punishes states that have historically done a better job of controlling medical costs. Disparities in the reimbursement rates then create great regional differences in benefits, premiums and, even more basic, the availability of a Medicare HMO option.
For example, the lawsuit contends that only 13 of Wisconsin's 72 counties have HMOs that participate in the Medicare program.
Wisconsin has 775,000 Medicare beneficiaries, and more than 31,000 of them are enrolled in managed-care plans, according to HCFA.
The lawsuit also points out that Wisconsin's monthly per-member Medicare reimbursement is unfairly far below those of other areas (See chart).
The lawsuit states that because HMOs can pass profits along to Medicare beneficiaries in the form of enhanced benefits, beneficiaries in areas with higher levels of reimbursement have better benefits.
Wisconsin is asking that the court declare the Medicare HMO reimbursement formula unconstitutional.