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Some Medicare Benefits Might Fall, Co-pays Rise: Fee-for-service 'Advantage' Plans Would Change Under House-passed Bill, Affecting 100,000 in Pennsylvania
By Steve Twedt, Pittsburgh Post-Gazette
July 5, 2008
Seniors in some Medicare Advantage plans may face reductions in benefits, as well as higher co-payments, if the Medicare bill passed by the House becomes law, according to a national health insurance association -- and Pennsylvania may be hit harder than any other state except California.
According to America's Health Insurance Plans, the possible 2.26 percent reduction for the state's 100,000 Medicare Advantage beneficiaries in fee-for-service plans could translate to an $841 million cut over five years.
"Nearly every Medicare Advantage beneficiary would be impacted," said Karen Ignagni, president and CEO of the insurance association, which is launching a national cable TV ad campaign on the issue this week.
The Medicare Improvements for Patients and Providers Act that passed the House last week included a provision that would reduce benefits and coverage for Medicare Advantage beneficiaries to help head off reductions in physician reimbursements.
The bill did not generate enough votes on the Senate side, though, and Congress recessed without taking further action.
At stake is a possible cut in the Medicare Indirect Medical Education rate adjustment made when Medicare Advantage patients are treated at academic medical centers, such as UPMC, Allegheny General, Washington Hospital and others.
The Medicare Advantage plans "have demonstrated excellent and cost-effective benefit programs and services," said Dr. Michael Culyba, vice president for medical affairs for the UPMC Health Plan. While opposing cutting physician reimbursements, reductions in Medicare Advantage "will likely result in a lower level of covered benefits" and possibly higher premiums.
"These changes are being made without considering the real impact these cuts would have on seniors," said HealthAmerica spokeswoman Kendall Marcocci. "Seniors will be surprised when they learn that they could face limited choices, reduced benefits, and higher premiums and out-of-pocket costs if these cuts became law."
Whether Congress will be sympathetic may be another matter, as fee-for-service Medicare Advantage plans have lately come under fire.
Just last month, House Ways and Means Committee Chair Charles Rangel described them as "the most overpaid and least efficient of all [Medicare Advantage] plans," saying they do not coordinate care and do not have the quality reporting requirements other plans have.
Rather than having a provider network, the private plans "deem" providers into the plan, and individual doctors can accept or reject the plan's payment. "This creates tremendous uncertainty and confusion for both beneficiaries and providers," Mr. Rangel, D-N.Y., said.
The Indirect Medical Education adjustment was established in 1983 to account for the higher cost of supporting the educational component and specialized services at teaching hospitals and is based on the ratio of medical residents to beds.
The Medicare Advantage program allows beneficiaries to receive Medicare services through private health plans. According to the Kaiser Family Foundation, enrollment in Medicare Advantage programs grew from 5.4 million in 2005 to 8.2 million in 2007, and represents nearly 20 percent of all Medicare beneficiaries.
In less than two years, the number of organizations offering fee-for-service plans has grown nearly five-fold. About 80 percent of Medicare Advantage beneficiaries are in private, fee-for-service plans.
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