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Medicare News
Congress Advised to Cut Subsidy to Medicare
Advantage Fee-For-Service Plans
Voluntary suspension of marketing the plans warmly
received in Washington
June 18, 2007 On Friday, seven health insurance
companies under fire for the tactics they were using to convince senior
citizens to buy their Medicare Advantage fee-for-service plans agreed to
stop their marketing until corrections can be made. KaiserNetwork.org
today looks at the reactions and also reports that the
Medicare Payment
Advisory Commission on Friday sent a report to Congress
recommending equalization of reimbursement rates for private Medicare
Advantage plans that are heavily subsidized by the government.
Seven Health Insurers Agree to
Suspend Marketing for Private Medicare Fee-for-Service Plans
Seven of the largest health insurers offering
private fee-for-service Medicare Advantage plans have entered into a
voluntary agreement to suspend marketing of the plans amid allegations
of illegal and aggressive sales practices,
CMS officials announced
on Friday, the
AP/Wall Street
Journal reports (AP/Wall
Street Journal, 6/18).
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Related Stories |
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Medicare Advantage Fee-For-Service Plans Pledge to
Correct Marketing Ahead of Schedule
President of America's Health Insurance Plans
issues statement
June 16, 2006
Seven Companies Suspend Marketing Medicare
Advantage Fee-For-Service Plans
CMS lays down strict guidelines to stop deceptive
marketing
June 16, 2007
Congress, AMA, Advocates All Targeting Medicare
Advantage Private Fee-for-Service Plans
AMA says most members report their patients were
denied coverage
May 24, 2007
Understanding of Medicare Advantage Private
Fee-for-Service Gained from New Report
Center for Medicare Advocacy finds problems with
access, consumer protections
May 24, 2007
Medicare Advantage Marketing Tactics Get Scrutiny of
Senate Aging Committee
Chairman Kohl notes some plans have announced
reforms
May 16, 2007
CMS Questions Marketing Tactics of Medicare
Advantage Plans
They fail to tell seniors they are not 'traditional'
Medicare
May 8, 2007
Medicare Rights Center Finds Problems with Care from
Private Health Plans
Advocacy group calls for Congress to end the
'Overpayments'
April 30, 2007
Democrats Consider Eliminating Extra Pay to Medicare
Advantage Plans to Raise Physician Pay
Medicare Payment
Advisory Commission's report under fire on docs pay
March 7, 2007
Senior Citizens in the Middle Again of Fight Between
Medicare Advantage Providers and Congress
Medicare Advantage fight a lot like Medicare+Choice debacle
Feb. 28, 2007
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Such practices have included the enrollment of
dead or mentally incompetent Medicare beneficiaries, the impersonation
of Medicare representatives and the use of personal information stolen
from federal records, according to a Senate investigation released
prior to a committee hearing in May
examining marketing
abuses (Kaiser
Daily Health Policy Report, 5/16).
The government spends 19% more on private
fee-for-service Medicare Advantage plans than traditional Medicare and
spends 12% more on all Medicare Advantage plans, according to the
Medicare Payment Advisory Commission
(Kaiser
Daily Health Policy Report, 5/8).
The insurers, which collectively provide insurance
for about 90% of all MA private fee-for-service plan beneficiaries, will
resume marketing after meeting six basic conditions:
● Informing beneficiaries that the plans do not
guarantee a physician will accept them as a patient;
● Requiring sales agents to pass written
examinations testing knowledge of MA plan details;
● Calling prospective beneficiaries to ensure
they understand fully how their MA plan will work;
● Working with physicians and other providers to
increase understanding of how the plans function (Lee,
Washington Post, 6/16);
● Providing CMS with a list of all sales agents
and authorizing CMS to share the list with state insurance departments
if necessary; and
● Including "delegated" brokers and agents, as
well as those sponsored by the plan, on lists of planned sales events
provided to CMS.
Under the agreement, insurers will be able to
enroll members during the suspension (Reichard,
CQ HealthBeat, 6/15). The agreement does not affect
ongoing criminal investigations, according to Abby Block, director of
the agency's Center for Beneficiary Choices (Washington
Post, 6/16). Insurers participating in the suspension are
Humana,
UnitedHealth Group,
Wellcare Health Plans,
Universal American Financial,
Coventry Health Care,
BlueCross BlueShield of Tennessee
and
Sterling Life Insurance,
according to a statement from CMS (Bloomberg/New
York Times, 6/16).
Comments
Block said, "This voluntary agreement demonstrates
the plans are stepping up to assure deceptive marketing practices end
and beneficiaries fully understand what they are purchasing" (Colliver,
San Francisco Chronicle, 6/16). Block added that the
alleged unethical sales tactics were committed by a relatively small
number of "rogue sales agents" rather than the companies themselves.
Karen Ignagni, president of
America's Health Insurance Plans,
said the insurance industry is "moving immediately" to put additional
safeguards in place against unethical marketing, including the
development of a uniform reporting mechanism to identify agents selling
on behalf of MA plans and "clear guidelines for health plans to report
serious broker-agent misconduct to CMS and the states."
Senate Finance Committee
Chair Max Baucus (D-Mont.) said, "I applaud plans for volunteering a
suspension," adding, "I'd like to see CMS spend less time promoting
private coverage and more time figuring out how to regulate the actions
of insurers who sell directly to seniors."
House Ways and Means
Health Subcommittee Chair
Pete Stark (D-Calif.) said, "The administration's response is to allow
private companies to determine which crimes they'll plead to and which
sentences they'll serve. This will do virtually nothing to protect
Medicare beneficiaries and is a pathetic attempt to pre-empt
congressional action" (CQ
HealthBeat, 6/15).
MedPAC Recommends Independent Entity Conduct
Comparative Effectiveness Studies of Health Care Services, Changes to
Medicare Advantage Payment Rates
The
Medicare Payment Advisory Commission
on Friday sent a June report to Congress that recommended equalization
of reimbursement rates for private Medicare Advantage plans and the
fee-for-service program,
CQ HealthBeat reports.
According to the report, the current MA plan
reimbursement system does not promote increased efficiency in health
care delivery and outcomes in large part because county benchmarks --
the basis of payment rates for the plans -- exceed fee-for-service
expenditure levels.
County benchmarks averaged 116% of expected
fee-for-service expenditure levels in 2006, and those benchmarks allowed
MA plans to offer extra benefits to attract Medicare beneficiaries, many
of whom enrolled in private fee-for-service plans, the report said.
"PFFS plans are providing extra benefits because of
the higher payment rates, not because of greater efficiency," according
to the report (Carey,
CQ HealthBeat,
6/15).
The report said that Congress could blend county
benchmarks with expected fee-for-service expenditure levels to determine
reimbursement rates for MA plans, with increased weight toward
fee-for-service expenditure levels in each subsequent year, to equalize
payment rates over time.
"For example, in the first year, the blend could be
80% historical and 20% FFS. In year two, the weighting could be changed
to 60/40, and so on," the report said.
In addition, the report said that Congress could
"freeze the private fee-for-service plans' benchmarks until traditional
Medicare fee-for-service plans catch up, cap the benchmark at a rate
that increasingly moves closer to traditional Medicare spending and use
competition to set benchmarks based on an average of bids,"
CongressDaily
reports (Edney,
CongressDaily,
6/15).
The report also recommended the establishment of a
home health care pay-for-performance system in Medicare and an
independent entity that would sponsor research on the comparative
effectiveness of health care services. In addition, the report
recommended implementation of a measure to encourage hospitals to seek
to reduce readmissions and a repeal of the current hospital wage index (CQ
HealthBeat, 6/15).
>> The report is available
online. Note: You must
have Adobe Acrobat Reader to view the report.
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