Briefs

The Medicare Payment Advisory Commission in its June report to Congress outlined options for bringing Medicare Advantage payment levels more in line with those of traditional Medicare fee-for-service expenditures. The current Medicare Advantage payment system doesn’t promote efficiency mainly because “inflated, administratively-set county benchmarks”—the basis of payment for Medicare Advantage plans—exceed fee-for-service levels, according to a report summary. Several approaches could be used to remedy this, such as freezing all county benchmark rates at their current levels until each county’s rate is at the fee-for-service level, or using a blend of fee-for-service and Medicare Advantage rates that would apply to a particular county, “increasing the weight of the fee-for-service portion over time,” MedPAC stated.

Seven health plan sponsors signed an agreement with the CMS to voluntarily suspend the marketing of their Medicare Advantage private fee-for-service, or PFFS, health plans because of recent concerns over questionable and unscrupulous sales and marketing practices (May 28, p. 12). The plan sponsors are: Blue Cross and Blue Shield of Tennessee, Coventry Health Care, Humana, Sterling Life Insurance Co., UnitedHealth Group, Universal American Financial Corp. and Wellcare Health Plans. Taken together, those plans represent 90% of the 1.3 million Medicare beneficiaries enrolled in PFFS plans, said Abby Block, director of the CMS’ Center for Beneficiary Choices, in a conference call with reporters. During the moratorium, those plans will still be allowed to enroll new beneficiaries, she said. CMS officials said June 15 that they would lift the suspension once the plans demonstrate that they have the systems and controls in place to meet the requirements set by the CMS for 2008.

Community Health Systems, Franklin, Tenn., signed a nonbinding letter of intent to acquire Empire Health Services, a two-hospital system based in Spokane, Wash., Empire said. No terms were disclosed, but Empire said that the sales proceeds would pay off its debt and provide funding to start a local healthcare foundation. The not-for-profit system said it has managed to turn around poor financial performance in the past three years, but it is not able to meet the long-term financial needs of the system while remaining independent. Community was chosen after Empire officials visited two other not-for-profit hospitals that Community acquired in Pennsylvania and South Carolina, Empire added. A Community spokeswoman declined to comment. Community owns or operates 80 hospitals in 23 states, and is slated to acquire Triad Hospitals, Plano, Texas, for $6.8 billion in cash and debt during the third quarter (See story, p. 14).

Democratic presidential candidate John Edwards unveiled the cost-saving measures in the universal healthcare plan he released in February. Edwards claims his plan would save an average family $2,000 to $2,500 annually and eliminate $130 billion a year in wasteful spending. The plan seeks to bring down costs by setting national accounting standards; requiring insurers to spend at least 85% of their premiums on patient care; creating patient-centered “medical homes;” and requiring healthcare markets and public plans to proactively monitor the health of patients with chronic ailments to reduce complications and hospitalizations. A large employers group unveiled its own plan for boosting healthcare coverage earlier in the week (See story, p. 14).

Illinois Attorney General Lisa Madigan accused two large physician practices in Champaign County of conspiring to turn away new Medicaid patients as a way to force the state to improve its reimbursements. The Carle Clinic Association and Christie Clinic “agreed to boycott new Medicaid patients to increase the effective Medicaid reimbursement rates and to accelerate reimbursement payments,” according to an antitrust complaint Madigan filed in Champaign County Circuit Court. Kirk Moberg, Carle Clinic’s chief medical officer, said Madigan’s antitrust allegation is baseless. “We did make a decision a few years ago to control the access of the Medicaid population into our system because the state reimbursement is inadequate. … This decision we made independently.” Christie Chief Executive Officer Alan Gleghorn, in a written statement, likewise rebuffed the allegations. Meanwhile, healthcare providers are looking for more guidance on how they might collaborate with physicians without running afoul of antitrust laws (See special report, p. 28).

Senate Finance Committee Chairman Max Baucus (D-Mont.) asked the CMS how it planned to ensure the safety of patients at 204-bed Martin Luther King Jr.-Harbor Hospital in Los Angeles. The hospital had been cited for providing poor care, and news reports have said that at least one patient may have died from neglect. In a letter to CMS Acting Administrator Leslie Norwalk, Baucus specifically asked how the CMS would ensure compliance with Medicare conditions of participation at the hospital. The CMS earlier had announced that the hospital would have 23 days to submit a plan of correction or lose Medicare certification. A plan to improve conditions at the hospital will be released soon, a hospital spokeswoman said.