Two of the nations largest healthcare lobbying groups crossed swords over the Medicare Advantage program in May, with the American Medical Association facing off against Americas Health Insurance Plans.
The AMA told Congress that its physician members dont like to deal with the Medicare Advantage program, and that they hold particular ire for private fee-for-service plans, a specialized type of Medicare Advantage plan also in the cross hairs of some congressional members.
In an AMA survey of 2,156 physiciansnearly half of whom had patients in private fee-for-service, or PFFS, plansdoctors responded that they received payments below the rate of regular Medicare, and a full 45% said they have experienced denial of services that are typically covered by Medicare.
Contrary to the widely reported claim that (Medicare Advantage) plans provide more benefits ... physicians are telling us that patients in MA PFFS plans may be getting even fewer benefits than they receive in regular Medicare, the AMA said in written testimony submitted to the House Ways and Means health subcommittee. The association said that while it supports competition in healthcare, it nevertheless wants financial parity in the Medicare Advantage program.
The AMA findings, however, run counter to a survey released earlier this year by Americas Health Insurance Plans. In the AHIP survey, 74% of physicians said they believed that cuts to the Medicare Advantage program would hurt the access seniors have to care. In a written statement also released in May, an AHIP spokesman said that despite recent testimony provided on Capitol Hill, the answer provided to our survey stands now as it did when we released it earlier this year.
The kerfuffle highlights the industrys full understanding that the Democratic-led Congress plans to trim back Medicare payments to plans and providers alike, even though they havent said what or how much is on the block.
Not that federal lawmakers havent dropped several big hints. House Democrats sharply criticized the CMS over the agencys lack of oversight of its Medicare Advantage program in May, this time targeting the small-but-growing PFFS plans, sending their strongest signal yet that the Medicare Advantage program is ripe for payment cuts. House Ways and Means health subcommittee Chairman Pete Stark (D-Calif.) said that while all providers have been put on notice this year, given what we know about (private fee-for-service) at this time, theyre at the top of my list.
Adding fuel to that fire was the June Medicare Payment Advisory Commission report to Congress that 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 doesnt promote efficiency mainly because inflated, administratively-set county benchmarksthe basis of payment for Medicare Advantage plansexceed 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 countys 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.
CMS also is on the backs of Medicare Advantage plans. Last week, seven health plan sponsors signed an agreement with the CMS to voluntarily suspend the marketing of their Medicare Advantage private fee-for-service plans because of recent concerns over questionable and unscrupulous sales and marketing practices. 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 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.
Though PFFS plans were authorized in the Balanced Budget Act of 1997, it has only been over the past two years that these types of plans have enjoyed a spike in enrollment, the Medicare Payment Advisory Commission has found. At the end of 2005, there were about 200,000 PFFS enrollees and Medicare had contracts with 17 plans. But as of last February, there were 1.3 million enrollees in 47 contracted plansa growth rate of nearly 300% over 18 months, according to MedPAC.
MedPAC says that growth in the plans is largely because of the Medicare Advantage payment policy. PFFS plans are paid, on average, 19% more than traditional Medicare, but MedPAC adds that sometimes the number is as high as 50%.
The Congressional Budget Office estimates that the CMS will spend $77 billion on the Medicare Advantage program this year, with roughly $13 billion on PFFS plans. While PFFS plans fall under the Medicare Advantage umbrella, the plans operate under different rules. One major difference between a PFFS Medicare Advantage plan and other Medicare Advantage insurers is that, in most cases, people who join a PFFS plan are not required to use a network of providers dictated by the insurer, according to the CMS Web site.
Beneficiaries can see any provider eligible to be paid by Medicare and who agrees to accept PFFS payment.
The CMS by law does not have the authority to review the annual bids except for discrimination in cost-sharing. And plans are exempt from reporting information associated with quality measures and performance improvement.
On Capitol Hill, lawmakers were quick to jump on what they deem as overpayments to the plans and the relatively lax oversight these types of plans receive. We may have to make adjustments in Medicare Advantage plans and ... in what we pay hospitals, doctors and everything else to keep the Medicare plans fiscally sound, Stark said at last months hearing.
At the hearing, Stark pressed Abby Block, director of the CMS Center for Beneficiary Choices, on whether the agency had any hard evidence that the private plans used the higher-dollar reimbursement rates to boost benefitslike eyeglasses, hearing aids and dental servicesfor their beneficiaries. According to data cited by Stark, health plans spend about $8.3 billion per year on added benefits for seniors enrolled in such plans.
Block said that while the agency does not review plan bids for private fee-for-service plans, it nevertheless relies on satisfaction surveys and other beneficiary data that show a high level of satisfaction with the plans. (Youre) handing out more than $8 billion to these plans, dont you think it would be a good idea to regulate it? Stark countered.What do you think? Write us with your comments at [email protected]. Please include your name, title and hometown.