MEDICARE+CHOICE: Reimbursement Cuts Debated

      Congress should scale back $11 billion in planned risk-adjustment cuts to Medicare HMOs this year, said the chair of a House subcommittee at a hearing yesterday. "We don't want the risk adjuster put into effect at all," said Rep. Michael Bilirakis (R-FL), who chairs the House Commerce subcommittee on health and the environment (Bloomberg/Boston Globe, 8/5). Testifying at the hearing, American Association of Health Plans President Karen Ignagni said, "In the past nine months alone, more than 725,000 Medicare beneficiaries have had their health care coverage disrupted and millions more beneficiaries are slated to see reduced benefits and increased out-of-pocket costs. America's seniors and disabled deserve better treatment from the federal government. The Medicare+Choice program is in crisis and Congress needs to act." She produced data prepared by PricewaterhouseCoopers detailing the estimated disparity between payments per beneficiary for traditional Medicare and Medicare+Choice in various counties nationwide as of 2004. The differences ranged from $800 to $3,500 or more (AAHP release, 8/4). In a statement released yesterday, Health Insurance Association of America President Chip Kahn said, "Arbitrary government rate caps to Medicare HMOs do not keep up with medical inflation. Additionally, the 'risk adjustment' being implemented by [HCFA] -- based on a faulty methodology -- effectively takes away funds from the overwhelming majority of private Medicare HMOs which ought to go for beneficiary care. ... [B]oth Chairman Bilirakis and Rep. [Peter] Deutsch (D-FL) feel beneficiary pain, and we wholeheartedly support their proposal" (release, 8/4). Also yesterday, House Ways and Means health subcommittee Chair Bill Thomas (R-CA) said delaying the risk-adjustment cuts is "on the list" of Medicare legislation to be reviewed. But Medicare HMOs may be far down on the list of organizations to which Congress will want to provide relief, as hospitals and other providers are also clamoring for increased reimbursements. "There's generally a level of distrust of them to begin with," said Rep. Sherrod Brown (D-OH) (Bloomberg/Boston Globe, 8/5).

Proliferating Prescription Plans
      Bilirakis yesterday also outlined a plan to provide a prescription drug plan to Medicare beneficiaries. He said, "No senior should be forced to choose between buying groceries and filling a prescription." His plan would assist states in developing drug-coverage programs, preserve options such as Medicare+Choice that provide drug coverage and establish a federal stop-loss program for low-income beneficiaries. He contrasted his approach with that of President Clinton: "Overly broad proposals spread resources too thin, threaten the fiscal stability of Medicare and provide a limited benefit to individuals. By targeting assistance to beneficiaries who are low-income or have high drug costs, we can more effectively help seniors in need" (release, 8/4).

Us Too
      Meanwhile, Sens. Olympia Snowe (R-ME) and Ron Wyden (D-OR) introduced their legislation to provide prescription drug coverage for seniors. They said the plan would be based on private-sector competition, subsidizing seniors' insurance premiums on a sliding scale in a manner similar to the Federal Employees Health Benefit Plan. Wyden said, "Our bill provides the only bipartisan approach on Capitol Hill to provide coverage that will assure seniors affordable access to the drugs they need to remain healthy. We think it is a reasonable approach that will address this growing problem, and give seniors the same type of prescription drug coverage enjoyed by members of Congress and federal workers" (Senate release, 8/4). The plan would be funded with a 55-cent tobacco tax increase and the acceleration of a15-cent increase already enacted. The plan has yet to be scored by the Congressional Budget Office, CongressDaily/A.M. reports (8/5).