Extra Payments Made to Medicare Advantage Plans Total $8.5 Billion

The Healthcare Intelligence Network reports that in 2008 extra payments made to Medicare Advantage Plans will total over $8.5 billion. There are payments reductions scheduled for 2010, but if the Medicare Improvements for Patients and Providers Act of 2008 went into effect in 2008, MA plans still would have paid 10.6 percent more than expected fee-for-service costs.

The majority of the extra payments were made because of the Medicare Modernization Act of 2003 which has expanded the role of private plans in Medicare in an effort to reduce the growth of spending in Medicare.

Medicare Pays Too Much for New Generics

According to this article on The Wall Street Journal Blog when the price of generic drugs plunges, Medicare is slow to reflect that price change.

A report published by the Health and Human Services’ inspector general looks at irinotecan, which is a cancer that went generic in February of this year. The average price of the drug factoring in sales of the branded version was $52. During the current quarter, Medicare was paying about $75 for irinotecan, which is still far above the average price.

Read the full report here.