If Congress follows the Medicare Payment Advisory Commission's advice, a controversial stabilization fund for health plans could be eliminated.
A new MedPAC report includes recommendations meant to create equity in how private health plans are paid in relation to each other and to traditional fee-for-service Medicare. One measure calls for Congress to eliminate a $10 billion stabilization fund designed to entice private plans into Medicare. The fund has been a source of controversy, with some calling it a "slush fund" and giveaway to HMOs. Congress does not have to follow the commission's suggestions.
In making its recommendation to eliminate the fund, as well as to take other steps to pay health plans on an equal basis as traditional Medicare, MedPAC Executive Director Mark Miller said the changes could make private plans reluctant to be part of Medicare.
Mohit Ghose, vice president of public affairs for America's Health Insurance Plans, a lobbying group, said a plan can access the funds only when it has proved that it is unable to set up a provider network and meet other conditions. The plan would have to show the money has been spent for beneficiary services.
The report also recommends eliminating payments to plans participating in Medicare if their patients use teaching hospitals. The effect on teaching hospitals is unclear because the health plans are not mandated to pass on the extra payment to those institutions.