WASHINGTON WIRE
February 1, 2008
Issue 158
Finance Committee Scrutinizes Private Medicare Fee-for-Service Insurers
President Expected to Propose Cuts to Health Programs in Budget
Economic Stimulus Package Moves to Senate Floor without Medicaid Increase
Hearings
Top Story
Finance Committee Scrutinizes Private Medicare Fee-for-Service Insurers
The Senate Finance Committee held a hearing this week to examine private Medicare fee-for-service (FFS) plans.
Private Medicare FFS plans under the Medicare Advantage program are paid under a capitated payment system like traditional managed care plans, but pay providers on a fee-for-service basis. They do not have provider networks, allowing beneficiaries to see any Medicare provider who agrees to accept payment from the plan.
According to witnesses at this week's hearing, the Medicare private FFS sector is the fastest growing sector of the Medicare Advantage program. Mark Miller, executive director of the Medicare Payment Advisory Commission (MedPAC), testified at the hearing that enrollment in private FFS plans has increased eightfold in two years and, on average, estimates that MA plans receive 113% of traditional Medicare rates and private fee-for-services plans receive 117%. Several witnesses testified that the current payment structure is flawed.
Witnesses described the impact of private FFS plans in rural areas, where the cash flow from the plans is often slow compared to traditional Medicare, and beneficiaries may face access problems. A witness from Washington stated that because of his bad experiences with private FFS plans, his clinic will not accept the plans' patients beginning next year.
Some Senators expressed frustration with private FFS plans going after dual eligibles (i.e. individuals eligible for both Medicare and Medicaid) because such beneficiaries may end up paying co-pays and other expenses that, under traditional Medicare/Medicaid, they would not have paid. During this discussion, witnesses alluded to deceptive marketing by the plans to vulnerable beneficiaries.
During last years' negotiations on the Medicare physician payment and children's health bills, lawmakers considered cuts to Medicare Advantage plans to pay for the legislation. However, the White House vowed to veto any legislation that broadly cuts the Medicare Advantage program. Following this week's hearing, it appears that such cuts, at least to private FFS plans, are not off the table for the Finance Committee as they negotiate a Medicare physician payment bill again this year.
Health Care News
President Expected to Propose Cuts to Health Programs in Budget
President Bush will release his fiscal year (FY) 2009 budget on Monday and is expected to cut discretionary spending for the Department of Health and Human Services (HHS) by $2.2 billion.
The National Institutes of Health (NIH) is expected to see flat funding and the Centers for Disease Control and Prevention (CDC) would receive a $433 million cut under the proposal, which has yet to be released.
In his State of the Union Address on Monday night, President Bush urged lawmakers to rein in entitlement spending and it is now expected that his FY 2009 budget will also cut billions of dollars from the Medicare and Medicaid program. Some are speculating that growth in federal health care programs will be cut by over $200 billion over five years, with $170 billion coming from the Medicare program.
Hospitals are expected to bear a large part of the proposed cuts, and payment cuts or freezes are expected for many providers groups.
Many stakeholders consider the President's budget dead on arrival, but, others note that with his veto pen in hand, the President continues to maintain significant control over legislative activity.
Economic Stimulus Package Moves to Senate Floor without Medicaid Increase
Despite significant efforts on the part of Medicaid advocates, the economic stimulus package approved by the Senate Finance Committee this week did not include a temporary increase to the Medicaid Federal Medical Assistance Percentage (FMAP).
The Senate Finance Committee approved its version of an economic stimulus package on Wednesday, making several changes to the House and Administration-approved version passed earlier in the week, including offering stimulus checks to low-income seniors and veterans with disabilities.
Medicaid stakeholders have been urging lawmakers to include a temporary increase in the federal Medicaid match as a means of assisting states and Medicaid beneficiaries during an expected economic downturn. Although Senator Rockefeller (D-WV) along with several other Committee Members, sent a sign-on letter to Chairman Baucus (D-MT) earlier in the week requesting a temporary increase in the FMAP, the provision was ultimately not included in the package.
Chairman Baucus has hinted, however, that his committee may consider a second stimulus package, but it is unclear whether an FMAP increase would be considered as part of that package.
Upcoming Events
Hearings
Tuesday, February 5, 2008
Fiscal 2009 Budget: Overview
Senate Finance Committee
10 a.m., 215 Dirksen
Fiscal 2009 Budget
Senate Budget Committee
10 a.m., 608 Dirksen
Wednesday, February 6, 2008
Fiscal 2009 Budget: Overview
Senate Finance Committee
10 a.m., 215 Dirksen
Fiscal 2009 Budget
Senate Budget Committee
10 a.m., 608 Dirksen
Thursday, February 7, 2008
Indian Health Service Nomination
Senate Indian Affairs Committee
9:30 a.m., 628 Dirksen
Fiscal 2009 Budget
House Ways and Means Committee
9:30 a.m., 1100 Longworth
Oversight of Sales of Private Medicare Plans
Senate Finance Committee
10 a.m., 215 Dirksen
Fiscal 2009 Budget
House Budget Committee
11 a.m., 210 Cannon
PTSD and Traumatic Brain Injury
House Appropriations - Subcommittee on Defense
1:30 p.m., H-140 Capitol
For More Information
For further information on any topics discussed or publications listed, or to get copies of anything mentioned in this alert, please call 202.466.6550 and ask for the Legislative Practice Group.
Powers Pyles Sutter & Verville, PC is a full service law firm specializing in health care and education law and located at
1501 M St., NW, Seventh Floor, Washington, DC 20005
© Copyright 2007, Powers Pyles Sutter & Verville, PC
All rights reserved.
