Managed Healthcare Executive - January 2009 - (Page 10)

{ POLITICS AND POLICY } Congress hopes to level ﬁeld between MA and FFS Critics say $15 billion of the $100 billion in MA outlays can be chalked up to excessive payments BY JILL WECHSLER Jill Wechsler, a veteran reporter, has been covering Capitol Hill since 1994. Policy makers say they don’t want to push out the good plans but must re ne payments and increase accountability and transparency. Bryan GROUP PFFS PLANS Dowd of the University of Minnesota says that Nearly 10 million seniors—one-fourth of MA plans are more exible than FFS Medicare Medicare bene ciaries—are enrolled in MA in coordinating services, but should not have plans, according to the Medicare Payment to be “propped up” with special subsidies. Advisory Commission (MedPAC). The MedPAC analysis points the nger at high fastest growth is in PPOs and private fee-for- benchmarks that ratchet up higher every service (PFFS), although HMOs still account year. The advisory panel wants MA benchfor about two-thirds of total MA enrollees. marks set at 100% of prevailing FFS costs, as The MA program has provided more with original Medicare managed care. But choice, particularly in rural areas, but at added because it is di cult for HMO-type MA cost and with little evidence of positive e ects plans to operate in low-cost and rural maron quality, according to Marsha Gold, senior kets, competitive bidding approaches and fellow at Mathematica Policy Research, at a other rate-setting methods are under review. recent brie ng. Ovations CEO Simon Stevens A competitive bidding system might work, noted that managed Medicare has the potential Dowd says, if there is a level playing eld to save money for the health system overall. between FFS Medicare and MA plans with The MA program is slated to cost $100 comparable quality reporting requirements billion this year, and critics say that about and accounting for administrative costs. $15 billion is excessive. MedPAC anaMedPAC will lay out these issues in its lysts reported that in 2009 CMS will pay March report to Congress and prepare a proMA plans 14% more than comparable FFS posal for comparing quality measures between costs; the di erence is even higher (18%) Medicare FFS and MA plans. Gold noted for local PPOs and PFFS plans, and a litthat “there probably will always be a role for tle narrower (13%) for HMO plans. private plans in Medicare;” the question is At the brie ng, a Senate sta er pre“at what options and at what cost.” MHE edicare Advantage plans cost too much, create bene t inequities and don’t do enough to improve quality of care, according public and private analysts. President-elect Barack Obama agrees with this assessment, as do many Congressional leaders. In discussing ways to pay for health reform last month, Obama pointed to the MA program as not necessarily “giving a good bang for the buck.” M dicted further cuts to MA plans because instead of providing more e cient, coordinated care at lower cost, some insurers are in the program “to make a quick buck.” The main o enders are PFFS plans, which get higher rates and don’t have to form provider networks or meet quality reporting standards. Group PFFS plans are responsible for much of the growth in this area because of their appeal to employers that want to o er uniform coverage across the country to workers and retirees. Nearly 1.7 million Medicare bene ciaries were enrolled in group PFFS plans as of June 2008, nearly double the 900,000 in 2006, according to Avalere Health. Legislation enacted last year requires most PFFS plans to establish provider networks by 2011, and everyone is watching to see if that prompts a big exit. PRUNING PAYMENTS 10 JANUARY 2009

Table of Contents Feed for the Digital Edition of Managed Healthcare Executive - January 2009

Managed Healthcare Executive - January 2009 Contents Editorial Advisors For Your Benefit News Analysis Politics & Policy Letter of the Law Managed Care Outlook New Day 5 New Realities of Disease Management Pharmacy Best Practices Health Management Technology State Report: Hawaii MHE Resource Ad/Edit Index

Managed Healthcare Executive - January 2009

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