Medicare Compliance & Reimbursement

Minorities contend that MA changes could cut quality of care.

In an effort to find funding for expanding the State Children's Health Insurance Program (SCHIP), legislators have identified inefficiencies in programs such as Medicare Advantage (MA), but minority advocates caution that proposed cost-saving changes to the MA program will only exacerbate current health-care disparities.

In testimony before the Senate Finance Committee, Medicare Payment Advisory Commission (MedPAC) chairman Glenn Hackbarth acknowledged the problems that plague the MA program.

"Unfortunately, MA has become a program in which there are few incentives for efficiency; although MA uses 'bidding' as the means of determining plan payments and beneficiary premiums, the bids are against benchmarks which are often legislatively set," Hackbarth testified. "Setting benchmarks well above the cost of traditional Medicare signals that the program welcomes plans that are more costly than traditional Medicare."

MA plans currently spend at 112 percent of the rate at which Medicare's more traditional fee-for-service (FFS) plans operate, Hackberth revealed--an astonishing difference that provides additional health-care options to a few at the expense of many.

"All taxpayers and all Medicare beneficiaries--not just the 18 percent of beneficiaries enrolled in private plans--are funding the payments in excess of Medicare FFS levels," Hackberth says.

The MA plan asks taxpayers to provide a select few Medicare recipients with more extensive health-care options, but more important, the additional options offered in MA plans have not demonstrated their efficacy.

"Many Medicare Advantage plans offer disease management, care coordination and preventative care programs, but little information is available on the degree to which the plans generate better health outcomes than the traditional Medicare program," explained Peter Orszag, director of the Congressional Budget Office.

Despite a lack of data demonstrating any tangible benefit received from these programs, Medicare benes have increasingly preferred MA plans to FFS plans, opting for the more-expensive plan at an alarming rate.

The MA program has experienced "unexpectedly strong growth in enrollment" throughout 2006 and in the first quarter of 2007, Orszag said in a statement. "As a result, shifts in enrollment out of the FFS program and into private plans increase net Medicare spending." Minorities And Insurers Band Together To Fight Funding Cuts Coming at a time when health care spending is rapidly spiraling out of control, the increase in MA spending seems an ideal opportunity to make a statement by cutting funding, but legislators have found growing resistance to MA cuts from minority advocacy groups and insurers alike.

Both the National Association for the Advancement of Colored People (NAACP) and the League of United Latin American Citizens (LULAC) expressed disapproval in letters they've sent to congressional leaders. These groups argue that cuts in MA funding will disproportionately disadvantage minorities because minorities use care-management services at [...]