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Report Recommends Reimbursement Change to Cut Medicare Costs
By
Stephen J. Baetge
Staff Writer
A
nonpartisan report released by the Medicare Advisory Payment Commission
(MedPAC) on March 1, 2010, recommended changes which could result
in Medicare savings of nearly $170 billion over 10 years if they
are adopted by congressional policymakers.
The biannual report advised Congress — for the fifth consecutive year — to
equalize reimbursements to Medicare Advantage plans with the traditional Medicare
fee-for-service program.
These recommendations were previously incorporated in the House-passed health
care reform bill, the Affordable Health Care for America Act (H.R. 3962).
According to nonpartisan Congressional Budget Office (CBO) estimates, equalizing
payments between Medicare Advantage programs and the traditional Medicare programs
will generate this high level of Medicare savings over the next decade.
H.R. 3962 is currently deadlocked with a competing health care reform package
approved by the Senate. A White House conference was held February 25, 2010,
in an attempt to resolve the legislative deadlock.
“I applaud the nonpartisan MedPAC report, which provides an intelligent
path toward strengthening Medicare for seniors,” stated Congressman Joe
Courtney, D-Conn. “This report is not just a debating point, but is central
to protecting and preserving this important health insurance program for seniors.”
“The Trustees of Medicare have warned the country that overpayment to the
Medicare Advantage program is one of the major cost drivers pushing Medicare
to its 2017 negative cash flow,” Courtney continued. “Following MedPAC’s
recommendations will extend the solvency of Medicare for all seniors and can
be done in a way to allow Medicare Advantage to continue to be a choice for those
who prefer it to traditional Medicare.”
Under the current reimbursement system, Medicare Advantage plans are reimbursed
by an average of 14 percent more than traditional Medicare plans.
Advocates and many lawmakers support replacing the existing reimbursement system
with one that reimburses traditional Medicare plans and Medicare Advantage plans
on an equal basis to eliminate preferential treatment to private companies for
providing the same services as the federal government.
Supporters of equal reimbursement were buoyed by the MedPAC report’s conclusion
that the Commission has consistently supported the concept of financial neutrality
between payment rates for the fee-for-service program and private plans.
“Once again, the independent Medicare Payment Advisory Commission reports
that all Medicare beneficiaries have to pay higher premiums because of the continuing
over-payments to private insurance companies through the Medicare Advantage program,” observed
Judy Stein, executive director of the Center for Medicare Advocacy, Inc.
According to advocates, the extra costs resulting from excess payments to Medicare
Advantage plans are borne by beneficiaries in the traditional Medicare program
and all taxpayers.
The MedPAC report found that the Part B premium was $3.35 per month higher in
2009 than it would have been if reimbursements were equalized.
“The healthcare reform bills passed by both the House and the Senate, and
the proposals by President Obama, would reduce this wasteful spending — saving
money for Medicare beneficiaries and taxpayers alike, and extending the solvency
of the Medicare program,” Stein concluded.
MedPAC was established under the Balanced Budget Act of 1997 as an independent,
nonpartisan congressional agency to advise Congress on issues affecting Medicare.
Each year, MedPAC issues recommendations on Medicare policy changes in biannual
reports to Congress.
This page and its contents ©2010
Metropolitan News Company, Inc.
