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MEDICARE IN 2009: “A Big Ugly Year”
JCHA HEALTHLINE-NEWS, November 2008
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The future of Medicare is not very pretty, according to predictions made
from former CMS administrators during a CMS Administrator Roundtable, held
in Washington D.C. on September 23, 2008. In an article that appeared in
Health Plan Week, Steve Davis[1],
the managing editor of the publication reported that former CMS
Administrator Tom Scully predicts 2009 will be a “big, ugly year” for
Medicare in general and Medicare Advantage plans in particular. “There
hasn’t been a major Medicare (reform) law in several years, and some
people think it can’t happen,” Scully told attendees. “But it can happen,
and it likely will happen next year almost for sure.” He also added that
this type of bill will most likely target rates paid to Medicare
Advantage insurers.
Davis reported that Nancy Ann DeParle, who left CMS (then known as the
Health Care Financing Administration or HFCA) in 2000 also agreed that a
bill is forthcoming, especially with the turmoil on Wall Street and the
growing national debt. “And if I am correct, health plans need to get
ready”, she warned. Insurers that sell Medicare Advantage plans need to
provide CMS with a rationale for the price differential between Medicare
Advantage and traditional Medicare fee-for-service (FFS). “I could
actually argue in favor of paying (MA insurers) more under Medicare if
they are really doing something to manage care and are showing results”,
she said.
Davis also cited comments by former HFCA Administrator, Gail Wilensky,
Ph.D. told attendees that the key problem under the existing Medicare FFS
model, is that the quality of care physicians provide has no effect on
their level of reimbursement. “Nothing they do, good or bad, impacts
their fees,” she said. “It is a broken part of part of Medicare that
urgently needs to get fixed.” She went on to explain that one of the
problems with FFS Medicare is that when you pay physicians a fixed dollar
amount for an office visit, you are not paying them to do chronic care
management. And the Medicare Advantage insurers haven’t yet demonstrated
they can improve the health of enrollees. “Medicare Advantage insurers
have the ability to lead the way and demonstrate to policymakers,
beneficiaries and taxpayers that they are providing real value. That is
the challenge for plans in the year ahead.” However, she cautioned
against trying to make too many changes to the system at once. “I would
advocate a more moderate approach over the next 10 years”, Wilensky said.
“The fundamental problem with Medicare is price fixing…Hospitals and
doctors get paid the same whether they do a good job or a bad job,” Scully
contended. Wilensky agreed and said Medicare has traditionally focused on
controlling the price of health care services rather than controlling
spending.
Submitted by:
Barbara Noon, RN, MSN, MBA, Principal, Ethos Partners Healthcare
Consulting
Reprinted from HEALTH PLAN WEEK, the industry’s leading source of
business, financial and regulatory news of health plans, PPOs and POS
plans. Featured story October 14,2008 by Steve Davis, Managing Editor, (sdavis@aispub.com).
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