Medicare Compliance & Reimbursement

Managed care is the base upon which President Bush wants to build a new Medicare.

That’s the gist of his new proposal for reforming the program and providing the nation’s seniors with prescription drug coverage. The administration floated an unofficial proposal in January, voicing the possibility that seniors would need to join a Medicare+Choice organization to get prescription coverage. But when legislators from both parties condemned the idea of forcing seniors to abandon their beloved fee-for-service plan and join

HMOs, the administration retreated for a few weeks to hash out a new plan. Bush announced his final proposal in a March 4 speech before the American Medical Association. Although seniors will not need to join managed care plans in order to secure drug coverage, the proposal is still a victory for managed care.

The plan would provide three different levels of prescription drug coverage within Medicare, Health and Human Services Secretary Tommy Thompson explained at the National Managed Health Care Congress in Washington March 11.

Medicare+Choice would be rechristened “Medicare Advantage” and would include prescription drug coverage. The next tier of Medicare would be “Enhanced Medicare,” which would be similar to regular Medicare but would also include comprehensive drug coverage, full coverage for disease management and protection from high out-of-pocket costs for hospital stays.

Benes who stick with their fee-for-service plan would receive a drug discount card, which administration officials claim would save them up to 25 percent on their medications and would provide a stop-loss ceiling. This appears to be the administration’s main concession to critics of its earlier plan.

Thompson wants to expand Medicare+ Choice, he said at the conference. Indeed, though the proposal would not force seniors to join private plans, those who do so would get the best drug benefit.

“This is the year we’ll work together and get it done,” Thompson said of prescription drug coverage. He called Medicare “a very popular and successful program that its beneficiaries appreciate,” but said it currently is not structured to give seniors modernized health services.

The administration’s reform “not only significantly improves access to prescription drug coverage, but also grants beneficiaries new freedom to choose health coverage — whether a PPO, HMO or other option — that is currently available in the private sector,” said Karen Ignagni, president of the American Association of Health Plans.

But Ignagni tempered her praise with a warning: A long political battle lies ahead, and plans will need to pitch in if they want to win. “There’s been a rush to judgment about the administration’s proposal without the facts,” Ignagni explained. “This is a time to inform seniors with the facts, rather than scaring them with rhetoric about losing your doctor.”

Proposal Faces Broad Opposition

(R-IA) have said the proposal doesn’t do enough for fee-for-service beneficiaries. Seniors who want to stay in FFS should get the same coverage as those who go with MCOs, Grassley said.

Democrats have offered a counterproposal that would offer more expansive prescription drug coverage to all Medicare benes. However, it would cost twice as much as Bush’s proposal, which is estimated to cost $400 billion over 10 years. To some degree, Bush’s foes have public perception on their side. If opponents of the president’s proposal can convince consumers that Medicare will be overrun by HMOs, it is unlikely the measure will gather much steam in Congress.

In addition, politically powerful senior groups are organizing against the Bush plan. The Leadership Council of Aging Organizations — a coalition of 50 nonprofit organizations including AARP and Families USA — wrote a letter March 5 to the president, arguing that his proposal is under- funded and would give beneficiaries only a fraction of the drug benefit they want.