California Healthline Rounds Up Recent HHS Action
Under a three-year demonstration project announced last week by the Bush administration, seniors in 23 states will have greater access to preferred provider organizations through the Medicare+Choice program, the Washington Post reports. Since M+C began in 1997, few PPOs have elected to participate in the program, but under a "new arrangement," HHS officials have convinced 33 plans to participate in the program by offering "special financial incentives" and reducing their risk (Goldstein, Washington Post, 8/28). Under the demonstration project, which does not require legislative approval, HHS will reimburse participating PPOs at either 99% of the rate for traditional fee-for-service Medicare coverage or the local Medicare+Choice rate, whichever is higher. Participating PPOs agree to cover all services available under traditional Medicare and may choose to provide additional coverage, such as prescription drug benefits (Garvey, Los Angeles Times, 8/28). Federal officials said that all 33 PPOs intend to include some kind of prescription drug coverage in their plans (Meckler, AP/Philadelphia Inquirer, 8/28). Participating PPOs are responsible for bearing the risk of any costs up to either 2% higher or 2% lower than actual expenses. Beyond those percentages, however, insurers have the option to share the risk with the federal government or continue to assume the risk entirely by themselves (Los Angeles Times, 8/28).
Beneficiaries who choose to enroll in PPOs -- which "allow a wide choice" of in-network providers and the ability to see an out-of-network doctor for an additional charge -- will pay a $60 to $80 monthly premium, compared with an average $54 monthly premium for coverage under both an M+C HMO and fee-for-service Medicare, USA Today reports. Beneficiaries in traditional Medicare also pay 20% coinsurance for services (Appleby, USA Today, 8/28). Enrollment in the new PPOs will become available to about 11 million Medicare beneficiaries in November, and coverage will begin in January. CMS Administrator Tom Scully said that about 200,000 beneficiaries are expected to enroll in one of the new PPOs (Washington Post, 8/28). A listing of the 23 states covered by the demonstration project is online.
The following is a roundup of other HHS-related news:
- HHS Secretary Tommy Thompson said last week that "he is not committed" to his position past February 2003 and has considered offers to return to the private sector, the Chicago Tribune reports. Thompson said that before he became HHS secretary, he told President Bush that he would serve two years in the position. "I certainly will comply with that. If he wants me to stay after the election, we'll sit down and talk," Thompson said. Thompson spokesperson Tony Jewel said that "Thompson's comments were only meant to show people" in Wisconsin, where Thompson served as governor for 14 years, that "he misses them" (Chicago Tribune, 8/25).
- The Atlanta Journal-Constitution last week reported that Dr. Mark McClellan, who has served for the past year on the president's Council of Economic Advisors, has become the "front-runner" for the FDA commissioner nomination. McClellan, a Stanford University physician and a health care economist, has advised the White House on health care policy and helped draft Bush's Medicare reform proposal. The FDA has not had a commissioner since Bush took office in January 2001 (Keefe, Atlanta Journal-Constitution, 8/25).