English disappointed after meeting with HCFA, Highmark
officials
Federal agency refuses to change funding for
Medicare+Choice, English said he will begin work on legislative
solutions
WASHINGTON, Aug. 5, 1999 – Officials from the federal Health Care
Financing Administration (HCFA) have turned down pleas by both
Highmark and U.S. Rep. Phil English to alter the formula by which
they reimburse the Medicare HMO program for the health care expenses
of Northwestern Pennsylvania seniors.
Unsatisfied with the response from the Health Care Finance
Administration, U.S. Rep. Phil English announced his intention to
pass legislation to force HCFA to fix faulty reimbursement rates.
English met Wednesday (Aug. 4) with officials from Highmark Blue
Cross and HCFA in Washington to get an explanation for low
reimbursement rates for the Medicare+Choice Program.
“While I appreciated their time, the outcome of our meeting was
unacceptable,” English said. “With that, I will immediately begin to
work with Health Subcommittee Chairman Bill Thomas to make changes
to HCFA's risk adjustment system and reimbursement rates, while
seeking more money for the program.”
English is a member of the House Ways and Means Health
Subcommittee.
HCFA 's reimbursement system uses a complicated series of
“factors” to determine the amount of money they are willing to pay
an HMO for Medicare+Choice clients. Reimbursement rates can vary by
almost 100 percent from region to region. The factors are based on
information from 1996 and include such things as the average number
of hospital visits, length of stay, costs for senior
hospitalizations and average doctor costs in any given county.
Final rates are then calculated by employing a “risk adjustment
system” which supposedly fine tunes reimbursements to reflect actual
medical claims by individual seniors. The risk adjustment system is
being phased in this year.
“What makes this whole complicated mess so bizarre is that it has
the effect of rewarding high-cost urban centers with higher
reimbursements, while more rural and inexpensive areas like
Northwestern Pennsylvania are punished,” said English. “HCFA thinks
their new risk adjustment system is just grand, but for seniors in
my district it's an unacceptable risk. It fails to account for the
current medical needs of seniors, and it completely ignores
outpatient costs in it's calculation.”
Because of the low reimbursement rates, seniors enrolled in the
Highmark Blue Cross Blue Shield's Medicare HMO, Security Blue, face
higher premiums and benefit reductions.
“HCFA is basing their figures on 3-year-old data that was
incorrect from the start,” English said. “And with HCFA's
unwillingness to re-evaluate their process including their data, we
will move to fix this problem through the Ways and Means Health
Subcommittee.” | 
U.S. REP. PHIL ENGLISH