Paying Medicare Advantage plans the same as fee-for-service Medicare would save the program $51.7 billion over 10 years, according to a Congressional Budget Office estimate requested by Rep. Pete Stark (D-Calif.). The savings would come from reducing Medicare HMO rates from 115% of traditional Medicare rates, a premium established under the Medicare Modernization Act of 2003; removing indirect medical education payments from the HMO rates; and eliminating a $12 billion incentive pool for Medicare Advantage insurers, Stark's office said. Stark, ranking minority member of the House Ways and Means Committee, has criticized the higher rates established as incentives to draw more private insurers to Medicare Advantage. Supporters of the higher payments contend increasing Medicare managed-care enrollment will yield long-run savings. -- by Tony Fong
Medicare HMO incentives top $50 billion over 10 years
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