Senate Finance Committee Seeks To Reduce Payments, Impose Restrictions On Some MA Plans

Main Category: Medicare / Medicaid / SCHIP
Article Date: 01 Feb 2008 - 7:00 PDT

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Senate Finance Committee members on Wednesday said they will further examine Medicare Advantage private fee-for-service plans this year after the Bush administration last year rejected proposed changes to MA plan payments and marketing rules, CongressDaily reports (Johnson, CongressDaily, 1/30).

Critics of the MA program have "leveled their strongest criticisms at private fee-for-service plans," CQ HealthBeat reports. They "say the care [private fee-for-service plans] provide is loosely managed and the plans are reimbursed at much higher rates," according to CQ HealthBeat. MA plans are paid, on average, 113% of the rates traditional Medicare pays, and private fee-for-service plans in the program are paid 117% of what traditional Medicare pays, according to the Medicare Payment Advisory Commission (Carey, CQ HealthBeat, 1/30). MedPAC has recommended eliminating the extra payments to MA plans, but it is an "idea that has no traction in the Senate or with the [Bush] administration," according to CongressDaily.

CongressDaily reports that the committee "likely will try to strengthen regulations on private fee-for-service plans and impose a small payment cut as part of a bill that would stop a Medicare physicians' pay cut from going into effect." Finance Committee ranking member Chuck Grassley (R-Iowa) at the hearing said that the lax regulation of private fee-for-service plans makes it easier for them to offer less care to beneficiaries. Sen. Jay Rockefeller (D-W.Va.) said that aggressive marketing practices of private fee-for-service plans target beneficiaries dually eligible for Medicare and Medicaid and offer them less-comprehensive coverage. The Finance Committee plans to hold a separate hearing on marketing practices this year.

MedPAC Executive Director Mark Miller at the hearing said that MA private fee-for-service plans have an advantage over MA PPO and HMO plans because they are not required to create networks or contracts with providers (Johnson, CongressDaily, 1/30). Finance Committee Chair Max Baucus (D-Mont.) said, "We will consider what we need to do to reform private fee-for-service plans," adding, "We will consider whether we need to check their growth. And we will consider whether we can better design the law to ensure that these plans serve the needs of beneficiaries."

Karen Ignagni, president and CEO of America's Health Insurance Plans, at the hearing said of Finance Committee members, "They're picking up where they left off in the fall. This is not a shift in position for them" (CQ HealthBeat, 1/30).

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