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Analysis: Private Medicare under fire
By TODD ZWILLICH
WASHINGTON, May 23 (UPI) -- Democrats appeared one step closer this week to cracking down on private insurance companies that offer a growing number of Medicare plans.
Lawmakers are pledging this summer to push legislation that reins in some of the plans, which they say charge the government inflated prices while sometimes using misleading marketing tactics to entice vulnerable seniors into signing up.
Supporters of the plans, including the Bush administration, say the plans provide vital extra benefits to many rural and low-income seniors. They warn that cuts threatened by Democrats could undermine healthcare access for millions of seniors participating in the growing program, known as private fee-for-service plans.
The plans frequently offer coordinated disease care and disease management services not available with traditional Medicare plans offered by the government. Only about 1.5 million seniors currently use private fee-for-service, mainly in rural areas.
But lawmakers have criticized the program because the government pays companies an average of 19 percent more per beneficiary than it pays for traditional Medicare services. In House hearings Tuesday, lawmakers also complained that the plans operate without strict government oversight.
Some witnesses told lawmakers that high payment rates and a lack of oversight had led to a kind of "gold rush" by companies. The plans rush to sign seniors, sometimes resorting to misleading information and other illegal marketing tactics to enroll as many as possible.
Rep. Fortney "Pete" Stark, D-Calif., chairman of the House Ways and Means Health Subcommittee, warned that private fee-for-service plans could face curbs, most likely in Medicare reform legislation planned for some time this summer.
"As we look to improve and protect Medicare, all provider payments must be reviewed and are subject to change. Given what we know about PFFS at this time, they're at the top of my list," he said.
Brock Slabach, a board member of the National Rural Health Association, told lawmakers that seniors enrolling in a plan often don't know that physicians are not required by Medicare to accept the plans.
"When beneficiaries actually need the services is when they discover the gaps," he said.
"Prospective enrollees are being told outright lies," David Lipschutz, staff attorney with California Health Advocates, told the committee.
But Bush administration officials defended the plans, saying they offer care coordination services that chronically ill Medicare beneficiaries often cannot get in other plans.
PFFS plans also allow beneficiaries to keep their additional benefits even if they move throughout the country, said Leslie Norwalk, administrator of the Centers for Medicare & Medicaid Services.
"I think it's important to be cognizant of what those benefits are," she told reporters in a briefing in advance of the House hearings.
One day before the hearings, CMS proposed new federal rules forcing insurers to report to the government on their marketing practices.
Responding to the new scrutiny of PFFS plans, insurers said the higher government subsidies are key to offering additional benefits. "If Congress cuts ... funding, the (PFFS) product is unlikely to remain a stable product in many areas," said Kathryn Schmidt, vice president of Blue Cross Blue Shield of Michigan.
Proposed cuts could come as part of a broader bill cutting Medicare physician payments and increasing consumer protections under the program's Part D prescription-drug benefit, congressional aides said.
Although she also warned against cutting the program, Norwalk suggested PFFS plans and other privately run plans under the "Medicare Advantage" program were likely to face curbs.
"I have no doubt that Medicare Advantage is bound to look different after this year," she said.
Copyright 2007 by United Press International
By TODD ZWILLICH
WASHINGTON, May 23 (UPI) -- Democrats appeared one step closer this week to cracking down on private insurance companies that offer a growing number of Medicare plans.
Lawmakers are pledging this summer to push legislation that reins in some of the plans, which they say charge the government inflated prices while sometimes using misleading marketing tactics to entice vulnerable seniors into signing up.
Supporters of the plans, including the Bush administration, say the plans provide vital extra benefits to many rural and low-income seniors. They warn that cuts threatened by Democrats could undermine healthcare access for millions of seniors participating in the growing program, known as private fee-for-service plans.
The plans frequently offer coordinated disease care and disease management services not available with traditional Medicare plans offered by the government. Only about 1.5 million seniors currently use private fee-for-service, mainly in rural areas.
But lawmakers have criticized the program because the government pays companies an average of 19 percent more per beneficiary than it pays for traditional Medicare services. In House hearings Tuesday, lawmakers also complained that the plans operate without strict government oversight.
Some witnesses told lawmakers that high payment rates and a lack of oversight had led to a kind of "gold rush" by companies. The plans rush to sign seniors, sometimes resorting to misleading information and other illegal marketing tactics to enroll as many as possible.
Rep. Fortney "Pete" Stark, D-Calif., chairman of the House Ways and Means Health Subcommittee, warned that private fee-for-service plans could face curbs, most likely in Medicare reform legislation planned for some time this summer.
"As we look to improve and protect Medicare, all provider payments must be reviewed and are subject to change. Given what we know about PFFS at this time, they're at the top of my list," he said.
Brock Slabach, a board member of the National Rural Health Association, told lawmakers that seniors enrolling in a plan often don't know that physicians are not required by Medicare to accept the plans.
"When beneficiaries actually need the services is when they discover the gaps," he said.
"Prospective enrollees are being told outright lies," David Lipschutz, staff attorney with California Health Advocates, told the committee.
But Bush administration officials defended the plans, saying they offer care coordination services that chronically ill Medicare beneficiaries often cannot get in other plans.
PFFS plans also allow beneficiaries to keep their additional benefits even if they move throughout the country, said Leslie Norwalk, administrator of the Centers for Medicare & Medicaid Services.
"I think it's important to be cognizant of what those benefits are," she told reporters in a briefing in advance of the House hearings.
One day before the hearings, CMS proposed new federal rules forcing insurers to report to the government on their marketing practices.
Responding to the new scrutiny of PFFS plans, insurers said the higher government subsidies are key to offering additional benefits. "If Congress cuts ... funding, the (PFFS) product is unlikely to remain a stable product in many areas," said Kathryn Schmidt, vice president of Blue Cross Blue Shield of Michigan.
Proposed cuts could come as part of a broader bill cutting Medicare physician payments and increasing consumer protections under the program's Part D prescription-drug benefit, congressional aides said.
Although she also warned against cutting the program, Norwalk suggested PFFS plans and other privately run plans under the "Medicare Advantage" program were likely to face curbs.
"I have no doubt that Medicare Advantage is bound to look different after this year," she said.
Copyright 2007 by United Press International
