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Volume 12 Number 98 News: Medicare Possible cuts to Medicare Advantage (MA) plans would have a sharp impact on enrollees who receive extra benefits, Centers for Medicare & Medicaid Services officials said May 21. MA, the managed care program, is particularly appropriate for the nearly 25 percent of Medicare beneficiaries who have five or more chronic diseases, see many different doctors, and take numerous prescriptions, acting CMS Administrator Leslie C. Norwalk said. It is specially warranted until electronic health records come into greater use in the traditional Medicare program, allowing for more medical management, she said. Beneficiaries, particularly those who have lower incomes, benefit enormously from being in MA, Abby L. Block, director of CMS's Center for Beneficiary Choices, said. The CMS officials' comments came at a media briefing, as CMS sought to defend MA against likely congressional action to cut managed care funding. Agency officials held the briefing the day before a scheduled House Ways and Means Subcommittee on Health hearing on the impact of the growth of one type of MA plan--private fee-for-service (PFFS) plans. PFFS Plans Garner Attention PFFS plans have been the subject of recent congressional and media attention because of estimates that they receive on average higher payments per enrollee--119 percent of traditional Medicare--than other MA plans. They have also been spotlighted in reports of aggressive and allegedly deceptive marketing practices by agents selling on behalf of plan sponsors. Health Subcommittee Chairman Fortney Pete Stark (D-Calif.) has said that, without more information on plan overhead, he may be forced to implement an overall cut in MA funding. Reducing plan funding to an amount equal to that paid per enrollee to traditional Medicare levels would save $60 billion over five years, he said (No. 89 HCDR 5/9/07 ). Norwalk said that because of congressional funding priorities, such as reauthorization of the State Children's Health Insurance Program and the needs of other parts of Medicare, undoubtedly the MA program will "look different" next year. She said that she wanted to make sure that decisions were made based on the most current information and with the knowledge of what impact the cuts would have on beneficiaries, particularly those in rural areas who have lacked MA options. Norwalk told reporters that the agency wants to educate the public about PFFS plans and how they differ from other MA plans, such as health maintenance organizations. Materials distributed at the briefing showed that 31.2 percent of MA enrollees in rural areas are in PFFS plans, a higher percentage than for other types of plans. Most Counties Impacted CMS maps of the nation and of specific states on the distribution of MA funds in general showed that the majority of counties are not paid at the same level of traditional Medicare and therefore would be affected by leveling legislation. CMS also placed on its Web site, state-by-state press releases and summary sheets about MA. The releases warn of impending MA funding cuts in the particular state. The releases claim that MA plans offer "coordinated care with a network of doctors as well as additional health care services Medicare does not cover." The one for Virginia, as an example, added that "federal funding cuts to these plans could result in the loss of important health care benefits for 68,137 people in Virginia .... [and] $561 million less in payments to Virginia health plans over the next five years." The summary sheets profile individual states, showing the "extra value per beneficiary per month" amount and the impact of limiting payment to that of traditional Medicare. They also show the percentage of counties within each state that have funding over that level. Discussing the PFFS plans specifically, officials at the briefing noted that the plans do not have provider networks and do not have to manage care. CMS authority over PFFS plans differs because CMS is not permitted to review their bids except for discrimination in cost sharing or to collect quality measurements. Norwalk said that CMS would like to have the authority to collect PFFS plan quality data. CMS plans to develop report cards beginning in the 2008 enrollment year so that beneficiaries may compare plans. The PFFS plans can be highly advantageous for employers, Block said. Because of the lack of a provider network requirement, retirees can be covered by the PFFS plan, regardless of where they reside. Materials provided by CMS at the briefing said that the agency is concerned that providers and enrollees are unaware of the plans' features. PFFS enrollees receive various benefits over those in traditional Medicare. For example, 85 percent have a copayment of $20 or less for a primary care visit and 75 percent pay no MA premium, the materials said. More information is available on the CMS website, click on the "Medicare Advantage in 2007" item.
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