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Update: Medicare Advantage Payments

This post on GOOZNEWS.com discusses how several reports have recently taken aim at Medicare Advantage. The NY Times states that payments to health insurance organizations on average are 12 percent higher than what the government would spend on beneficiaries in traditional Medicare, and payments to Medicare Advantage plans are 17 percent higher.

How will the new administration deal with Medicare Advantage, since payments are ridiculously higher than traditional Medicare?

Medicare Advantage Paid Too Much

Fierce Healthcare reports that studies form the Medicare Payment Advisory Commission suggest that private health care plans for Medicare beneficiaries may be a good place to start cutting. The studies also show that private insurance plans are driving up costs because they are paid on average 13 percent more than allocated for traditional Medicare. Do you think private health care plans should be cut?

New Rules are Imposed on Medicare Advantage Plan Sales

Yesterday’s article on ModernHealthcare.com discusses that the Centers for Medicare and Medicaid Services have issued compensation requirements for sales agents that sell Medicare Advantage plans and prescription drug plans to Medicare beneficiaries.

Some of the rules include paying compensation to all agents according to fair-market value and adjusted for inflation for similar products in the same geographic area. To make sure that everyone is compliant with the new rules, agents will have to CMS their compensation structures for the previous three years as well as the compensation structure they are implementing for 2009.

Home Health Care Agencies will Receive a Slight Medicare Payment Increase in 2009

EmaxHealth recently reported that CMS will slightly increase Medicare payments on average to home health agencies in 2009. It will also take steps to remedy cases in which providers bill Medicare unusually large amounts.

Home health agencies on average are expected to receive an increase of 2.9% or an additional $490 million for changes in costs of goods and services. Agencies will have to report quality data on a regular basis to avoid a 2% reduction in payments.

Medicare Co-Pays and Premiums Expected to Rise

FierceHealthcare reports today that a recent study conducted by Avalere Health LLC found that for the largest 10 drug companies, premiums are expected to rise up an average of 31 percent next year. It is also speculated that this in term might cause insurers to increase drug co-payments 75 percent (about $7) for generic drugs and a 60% increase (about $40) for brand drugs.

A spokesperson from Humana, an insurer, mentions:

“Prices reflect the experience we've seen over the past three years, and our expectations around what will most interest our members and potential members going forward."

Thirteen Recommendations for Eliminating Medicare Fraud

Medicare fraud schemes are very common in this day and age. The American Association for Homecare has announced 13 recommendations in this post that could potentially eliminate most of Medicare fraud that relates to the home medical equipment (HME) sector. This association works alongside with Congress to implement these recommendations to combat Medicare fraud.

Here are the recommendations set forth by the American Association for Homecare:

Mandate Site Inspections for All New Home Medical Equipment Providers
Require Site Inspections for All HME Provider Renewals
Improve Validation of New Homecare Providers
Require Two Additional Random, Unannounced Site Visits for All New Providers
Require a Six-Month Trial Period for New Providers
Establish an Anti-Fraud Office at Medicare
Ensure Proper Federal Funding for Fraud Prevention
Require Post-Payment Audit Reviews for All New Providers
Conduct Real-Time Claims Analysis and a Refocus on Audit Resources
Ensure All Providers Are Qualified to Offer the Services They Bill
Establish Due Process Procedures for Suppliers
Increase Penalties and Fines for Fraud
Establish More Rigorous Quality Standards

New Obama Campaign Warns Seniors About Medicare Reductions

I came across this post on The Huffington Post in which it discusses Senator’s Obama’s recent ad campaign that show several shots of distressed seniors in order to drive the message that McCain wants to tax health care benefits and cut Medicare.

The campaign puts the figure at $882 million for Medicare alone. The post also mentions that the McCain campaign did not make a statement about which elements of the program would be cut. Watch the video below:

Should Medicare Pay for Hospital-Acquired Infections?

The Healthcare Economist poses the question “Should Medicare pay for these hospital-induced health care costs?” in this latest post.

The problem if Medicare implements a policy in which they do not pay for nosocomial infections is that doctors would report nearly all infections as community-acquired rather than hospital-acqiured. This in term would adversely affect the reporting of infections.

What are your thoughts? Should Medicare ultimately pay for hospital-acquired infections?

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.

Additional News for Medicare’s New Hospital Policy

Yesterday, we posted about Medicare’s implementation of its new policy in which it will not pay hospitals for any costs that are related to patients being injured due to medical errors while they are in a hospital’s care.

According to this article on NEWSInferno.com, Medicare posts a list of mistakes that it will not pay for on its website. Medicare will not pay for mistakes that include when patients

• Receive incompatible blood transfusions
• develop infections after certain surgeries
• must undergo a second operation to retrieve a sponge left behind from a first surgery
• experience serious bedsores, injuries from falls, and urinary tract infections caused by catheters

It is estimated that this policy will affect several hundred thousand hospital stays out of the 125 million people covered annually by Medicare.

Managed Care Provider Cigna adds More States to Medicare Advantage

CnnMoney.com reports that Cigna will add 15 more states to its individual Medicare Advantage plans next year in order to grow its senior business.

Some of the states Cigna will introduce plans to include California, Florida, Illinois, Massachusetts and Ohio. Of the 13 existing states, Cigna also plans to expand the number of counties to which it offers Medicare Advantage plans. Cigna only recently started offering Medicare Advantage coverage last year. It is looking to expand their services by also adding preventive dental care reimbursement to its Advantage plans for next year.

Brand-Name Drugs are Favored by Medicare Beneficiaries

According to this article in EmaxHealth, brand-name medications account for almost two-thirds of all prescriptions filled by Medicare beneficiaries. Patients are asking for brand-name drugs when the program provides coverage and are asking pharmacists for generic drugs when they have to pay out of pocket.

When patients switch from brand-name to generic drugs, more than likely they’ve reached the coverage gap in which they must cover the full cost of the prescriptions. Woody Eisenberg, Medco Chief Medical Officer mentions that when Medicare beneficiaries become aware of the coverage gap they "become acutely aware of the cost difference between brand-name and generic drugs and most make the switch."

Medicare Monthly Premium Costs Remain the Same for Elderly and Disabled in 2009

AHN reports that Medicare premiums for the disabled and elderly will remain constant at $96.40 next year, according to the U.S. Centers for Medicare & Medicaid Services.

The premium and deductible paid by consumers cover home health facilities, durable medical equipment, and cost of physicians. The Medicare Part B Program will also retain its costs at $135 this year. So far the only costs expected to rise is monthly premium payment for Part A coverage which will rise form $423 to $443 in 2009.

Marketing Documents for Medicare Prescription Drug Benefits is Confusing

The Wall Street Journal blog discusses how marketing brochures for Medicare prescription drug plans are doing a bad job of meeting guidelines set forth by the feds in this latest post.

A report published by the inspector general’s office in the Department of Health and Human Services found that 85% of marketing materials did not meet guidelines set out by the Center for Medicare and Medicaid Services. Some problems with the documents are that a lot of marketing documents that are produced in conjunction with an insurer and a pharmacy fail to mention that other pharmacies are available. This is required by law. Another problem is that some documents do not include required information on the subsidy that is available to beneficiaries with low incomes.

Medicare and Medicaid Rise to the Top

The Wall Street Journal blog reports that while the share of Americans that got health insurance through work or bought it on the private market last year declined, the number of Americans insured through Medicaid and Medicare has increased. These are numbers based on the latest report from the US Census Bureau.

This change shows that there is an overall decline in the percentage of Americans who are uninsured, and this goes against recent trends of rising uninsurance rates. See the full report here.

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.