Medicare Compliance & Reimbursement

Flush with federal funding, plans are making their products more attractive.

Less than a month after the government increased their reimbursement rates by over 10 percent, managed Medicare plans are putting the extra money to use.

A number of plans participating in Medicare Advantage - formerly known as Medicare+Choice - have announced over the past two weeks that they are decreasing premiums and cost-sharing, enhancing benefits or contributing to a benefit stabilization fund that would offset potential increases in premiums or decreases in benefits in the future.

Newly announced results from an AAHP-HIAA member survey confirm this trend. Plans representing 93 percent of MA benes are using the funding increase to lower their premiums, AAHP-HIAA announced Feb. 3.

Plans representing 60 percent of MA benes are increasing their benefits, and plans representing 80 percent of MA benes are decreasing the amount of co-pays and deductibles. A significantly smaller number of plans are contributing to the benefit stabilization fund, AAHP-HIAA President Karen Ignagni said at a Feb. 3 press briefing.

"The results indicate very clearly that the Congres-sional action is getting results," Ignagni said.

The increased funding has created "a solid foundation for the private sector in Medicare," according to Ignagni. Companies representing 80 percent of benes believe they will expand their Medicare Advantage enrollment in 2004, and companies representing 75 percent of benes say they will increase enrollment in 2005, according to the AAHP-HIAA survey

Several plans are rushing to announce the good news to their members - and to the large market of potential future members.

"We have enhanced benefits in areas that members tell us are most important to them," announced Howard Phanstiel, president and CEO of PacifiCare Health Systems Inc. "The additional funding also presents us with opportunities to expand our Medicare+Choice service area and to launch new, innovative programs."

Oxford Health Plans was another of the several plans to announce enhancements to its Medicare program. "We believe that a continued, more stable and predictable pricing environment will enable us to support Medicare beneficiaries for years to come," said Charles Berg, Oxford's president and CEO, in remarks that seem aimed at seniors who are skittish about joining managed care plans given the plans' mass exodus of recent years.

AAHP-HIAA has also heard that the Centers for Medicare & Medicaid Services has been flooded by applications to expand MA offerings, Ignagni said.