Medicare Compliance & Reimbursement

10.6-percent increase could facilitate plans' reentry to Medicare.

The Medicare program is looking more and more attractive now that the government has given participating health plans their biggest funding increase ever.
 
The Centers for Medicare & Medicaid Services announced Jan. 16 that Medicare+Choice plans will receive boosts averaging 10.6 percent, five times larger than the average increases over the last five years. The Bush administration is hoping that the increased funding, in addition to other carrots extended in the recent Medicare reform law, will not only keep participating plans from leaving the program but also convince new plans to give Medicare a try.
 
CMS said plans can use their increased funding to "reduce beneficiary premiums or copays; enhance benefits; stabilize or expand the network of doctors and other health care providers available to seniors; [and/or] reserve funds to offset either premium increases or reduced benefits in the future."
 
Already, some Medicare plans are doing exactly that. Oxford Health Plans Inc. immediately announced that it will enhance the benefits in its Oxford Medicare Advantage plan and will consider reentering certain counties that it had exited in recent years due to low reimbursement rates. Other plans are sure to follow.
 
The American Association of Health Plans-Health Insurance Association of America applauded the rate increases, but warned that regulators need to make still more improvements if they want private plans to rush back into Medicare. "The effects of years of under-funding will not be reversed overnight," said AAHP-HIAA President and CEO Karen Ignagni. "But we are seeing evidence that the process of stabilizing - and ultimately enhancing - private sector Medicare is well under way."
 
Plans have until Jan. 30 to incorporate the new reimbursement information in revised Adjusted Community Rate Proposals, outlining the areas they intend to serve and the benefits they intend to offer in the coming year. This gives plans that said last year that they were exiting Medicare or scaling back their offerings an opportunity to reverse those decisions.