The federal government is considering lowering the amount of money paid to private fee-for-service Medicare Advantage (MA) plans.
The House Committee on Ways and Means Subcommittee on Health this week heard the testimony of the Medicare Payment Advisory Committee (MedPAC). Mark E. Miller, MD, MedPAC's executive director, outlined the committee's plea for more financial equity between the plans.
The Centers for Medicare and Medicaid Services currently pays an average of $540 per beneficiary for traditional FFS Medicare and $680 per beneficiary under private Medicare plans, a Medicare fact sheet indicates.
"The current MA payment policy is inconsistent with MedPAC's principles of payment equity between MA and the traditional FFS program," said Miller. "Financial neutrality means that the Medicare program should pay the same amount, adjusting for the risk status of each beneficiary, regardless of which Medicare option a beneficiary chooses."
While MedPAC urged Congress to set MA payments to 100 percent of FFS Medicare rates, Miller noted that traditional FFS should not be mistaken for a "gold standard" of efficiency, either in terms of program costs or the value beneficiaries receive for each dollar of program expenditures.
Efficiency and quality vary across plans and across plan types, Miller said. "All taxpayers, and all Medicare beneficiaries - not just the percent of beneficiaries enrolled in private plans - are funding the MA payments in excess of Medicare FFS levels," he added.
The American Medical Association issued a statement to the Subcommittee stressing the effect of MA plan inequity on physicians.
Among physicians with patient in a Medicare Advantage private fee-for-service plan, 45 percent have experienced denial of services typically covered in traditional Medicare, the statement said.
AMA conducted a March 2007 survey of physicians paid by MA plans. The survey found that 51 percent of physicians paid by managed MA plans and 45 percent of physicians paid by private MA plans received payments below the traditional Medicare rate.
"The private health plans were supposed to inject competition into the Medicare program, but instead we've ended up with a federal handout to the insurance industry," said AMA Board Chairman Cecil Wilson, MD. The federal government has estimated that eliminating overpayments to private insurers will save Medicare $65 billion over five years, Wilson noted.
"Congress has to make a choice - preserve access to care for all seniors by stopping next year's Medicare cut to doctors, or continue to help insurance companies line investors' pockets," said Wilson.