Copyright 1999 Federal News Service, Inc.
Federal News Service
MARCH 18, 1999, THURSDAY
SECTION: IN THE NEWS
LENGTH:
1364 words
HEADLINE: PREPARED STATEMENT OF
REP.
PETE STARK
BEFORE THE HOUSE WAYS AND MEANS COMMITTEE
HEALTH CARE SUBCOMMITTEE
SUBJECT - MEDICARE+CHOICE
BODY:
I want to commend Chairman Thomas for
holding this hearing. I share his concern that the Medicare+Choice program work
effectively for beneficiaries. In fact, I have introduced legislation, HR 491,
The Medicare+Choice Improvement Act, to make a number of changes to the program
that would increase beneficiary protections as well as address some of the
industry's concerns. I think many of the provisions of this bill are also
incorporated in the Administration's recommendations for improvements to the
Medicare+Choice program. One issue upon which I hope we can all agree is that
the filing date for plans to submit their benefit and price information (the ACR
filing date) should be moved from May 1 to July 1 in order to give plans the
time necessary to plan the following year's rates more accurately.
In a
future hearing, I hope we will hear from plan enrollees. Medicare beneficiaries'
satisfaction with the Medicare+Choice program is a key component of whether the
program will expand. We will hear plenty regarding the health plans' financial
concerns today; we need to also hear from enrollees.
It is my understanding
that today's hearing will focus on risk adjustment, HCFA's
quality improvement initiatives for Medicare+Choice plans, and the beneficiary
education campaign.
Let me emphasize that I think it is very important that
HCFA move forward with quality initiatives for managed care plans. We are
turning over a growing portion of the Medicare program to these private
companies and it is incumbent upon us to ensure that we are getting a quality
product for our dollar. To that end, I urge HCFA to continue moving ahead and to
resist calls from the industry for more delay.
I would also like to submit
for the Record a fact sheet that describes the development of HCFA's Quality
Information System for Managed Care (QISMC). As this fact sheet shows, the
industry has been fully involved in the development of QISMC from day one and
HCFA has been very responsive to their concerns throughout the process.
On
the beneficiary education front, I cannot over-emphasize the importance of
making sure that Medicare beneficiaries understand their options and the
consequences of those options when they consider signing up for a
Medicare+Choice plan. Last year, I sent a newsletter to seniors in my district
that explained the new Medicare+Choice program. This year, I've included a
notice in my most recent newsletter that California now has access to the
1-800-MEDICARE number where beneficiaries can get answers to their questions
about Medicare+Choice. I urge my colleagues to do the same. We must also work to
ensure that HCFA receives their full appropriations request of $150 million for
running an effective beneficiary education campaign.
One of the pleas we
will hear from the health plans later today is that we delay the implementation
of risk adjustment. On behalf of the HMOs that have done the
right thing and enrolled a fair and representative proportion of the Medicare
population - both the sick and the well - I urge that Congress not consider
legislation delaying the phase-in of the risk adjuster. Any delay will reward
those plans who have avoided the sick and chronically ill, and punish those who
have sicker than average patients - and that is exactly the opposite of good
health policy.
HCFA has already announced that they will phase-in the
risk adjustment over five years - a compromise that is
supported by the Medicare Payment Advisory Commission (which includes Ms.
Newport, one of today's witnesses ) whom we appointed to provide us with expert
advice on Medicare. Let's heed their advice. Even this compromise hurts the best
HMOs and gives the industry a $4.7 billion bonus over the next five years.
Further delay is simply not warranted.
There is another fact surrounding
risk adjustment that seems to continually get lost in the
debate. HCFA did not dream up this idea as a way to reduce Medicare HMO
payments. In fact, the Balanced Budget Act required HCFA to develop such a
risk adjustment system. When you read the BBA language, it is
no surprise at all that HCFA started out with a hospital-based risk adjuster.
Let me quote: "The Secretary shall require Medicare+Choice organizations... to
submit data regarding in-patient hospital services for periods beginning on or
after July 1, 1997 and data regarding other services and other information as
the Secretary deems necessary for periods beginning on or after July 1, 1998.
The Secretary may not require an organization to submit such data before January
1, 1998." It was precisely at the direction of the BBA that HCFA began with the
collection of hospital- based data. Since BBA also required a risk
adjustment system to be implemented "no later than January 1, 2000,"
none of us should be surprised that they had to start with a system that uses
the data they have first been able to collect and analyze.
I also take issue
with the arguments from the managed care industry that Medicare is not paying
them enough today to remain in the program. I would like to enter into the
Record a summary of the ways we have been overpaying Medicare HMOs. I would also
like to enter a letter from the HCFA Administrator that describes a little known
"glitch" in the Balanced Budget Act that overpays HMOs $8 billion over five
years, and $31 billion over ten years. This overpayment occurs because we took
away the authority of HCFA to adjust for overpayments in 1997. We paid plans a
higher amount than was justified in light of the lower medical inflation which
actually occurred. By allowing these overpayments, we build into the budget base
billions of dollars in extra payments. As the Administrator's letter makes
clear, the other budget savings in the BBA do not even correct for this mistake
- let alone reduce the earlier, underlying overpayment to the Plans. I couldn't
let this opportunity pass by to also highlight that what we will hear from the
health plans on the last panel of this hearing proves why the Premium Support
plan being pushed by a majority of the Bipartisan Commission on the Future of
Medicare will not work.
AETNA is testifying today that:
"If the current
reimbursement structure is not adjusted, more Medicare+Choice organizations are
likely to withdraw from areas served and beneficiaries enrolled in the remaining
plans will likely experience premium increases or reduced benefits."
Similarly, PacifiCare's testimony states:
"These problems (relating to
risk adjustment) will make it difficult for Medicare+Choice
plans to operate in certain markets and to maintain a level of benefits and
services to which beneficiaries have become accustomed."
In other words, pay
us more or we can't offer extra benefits - in fact, we may not even stay in the
program. As I've already described, we currently pay Medicare HMOs more than we
should. We pay the plans more for the people they enroll than we would have paid
if those people had stayed in Medicare fee-for-service. To rephrase that, the
taxpayers would actually save money if we abolished the Medicare+Choice program
today.
Unfortunately, the beneficiaries in these plans who have been getting
extra benefits at little or no cost are the first ones who will lose under the
Premium Support model. That is why we need to improve the core Medicare program
so that everyone has a drug benefit and catastrophic protection - and so that
people do not need to join an HMO to get extra benefits.
But, if plans say
they cannot offer extra benefits at a time when we are overpaying them, they
certainly won't be able to do so if Medicare were to actually start saving money
by paying them more accurately for the people they enroll.
And, if the plans
cannot offer extra premiums, who in the world would want to join a system that
rationed their choices and services?
Premium support won't work to save
Medicare - it is just a way to raise premiums on seniors and the disabled to
force them into bare- bones, no-frills HMOs that will offer no extra benefits.
I hope all of the members will consider the testimony of these witnesses
before they endorse the Premium Support scheme.
END
LOAD-DATE: March 19, 1999
