Congress Delays Competitive Bidding Program

A new competitive bidding program for Medicare-approved equipment and supplies was supposed to take effect on July 1, 2008. However, the Congress has delayed this.

There has been much discussion in the news as to what impact competitive bidding may have on the availability of certain equipment and supplies, but Medicare has assured beneficiaries that it will "make sure you get the supplies and services you need."

If you changed your supplier in anticipation of this new program going into effect, you may continue to use the new supplier, go back to your old one, or choose another supplier. To locate companies that sell Medicare-approved equipment and supplies, click here.

Source: Medicare.gov

Congress Passes New Medicare Bill

Congress overrode a Presidential veto to pass a New Medicare bill. The new bill will prevent a 10% pay cut to doctors who treat patients on Original Medicare, but will cut payments to insurance companies that offer Medicare Advantage plans (and will slow the growth of such plans).

Approximately 25% of Medicare recipients are enrolled in Medicare Advantage plans. While some contend that Medicare Advantage plans cost the government more per person than Original Medicare, the President vetoed the bill because he said that reducing payments to the plans “would force them to reduce benefits.”

The new law also sets strict standards for the marketing of Medicare Advantage plans, some of which have been criticized for their sales tactics. Additional provisions in the new law will reduce co-payments for mental health services, and will increase assistance to those with lower incomes.

However, it will also delay a competitive bidding program for suppliers of medical equipment (such as oxygen tanks and power wheelchairs). This was another reason why the President vetoed the bill, saying that competition “should be expanded, not diminished.”

Finally, the new bill does not fix the fundamental flaws in the formula Medicare uses for paying doctors, and unless a new law is passed doctors will face a 20% cut in their Medicare payments by the end of 2009.

Source: New York Times

Identity Theft Risk With Medicare Cards?

The Social Security Administration wants Medicare to remove Social Security numbers from Medicare cards over concerns that it “unnecessarily places millions of individuals at risk for identity theft.” More than 40 million people have Medicare cards with Social Security numbers on them.

However, Social Security cannot prohibit Medicare from using Social Security numbers (only Congress could do so), and Medicare officials resisted the suggestion, saying that replacing Social Security numbers on Medicare cards would be costly and impractical. While the Office of Management and Budget said Medicare should eliminate the use of Social Security numbers within 18 months, Medicare said that it would take 10 years and cost $500 million.

Most private insurance companies have abandoned the use of Social Security numbers as identifiers because most states forbid it. The director of the antifraud department at the Blue Cross and Blue Shield Association said that medical identity theft is the fastest-growing form of health care fraud, and to prevent such fraud, Blue Cross and Blue Shield stopped using Social Security numbers on their cards several years ago. Further, many federal agencies are taking steps to remove Social Security numbers from identification cards.

Social Security said that the numbers were “linked to vast amounts of personal information”, and that individuals who carry their Medicare cards could become victims of identity theft. However, Medicare played down the risk of identity theft from the misuse of Medicare cards, and warned that if the government suddenly issued new Medicare cards or identification numbers, it could startle or alarm beneficiaries.

Source: New York Times

Shingles Vaccine May Be Covered Under Part D

The "shingles vaccine" is the zoster vaccine (trade name Zostavax®) and it will be available for reimbursement under Part D, so contact your Part D plan for more information about costs and reimbursement. More information is available from the CMS website at this link:

http://www.cms.hhs.gov/PrescriptionDrugCovGenIn/04_Formulary.asp#TopOfPage

Or read the free booklet at this link:

http://www.cms.hhs.gov/MLNMattersArticles/downloads/SE0727.pdf

Note that Medicare Part B does not cover the new shingles vaccine, but check if there are local drug assistance programs available by contacting a counselor at your State Health Insurance Assistance Program. To find the one for your state, go here:

http://www.medicare.gov/contacts/static/allStateContacts.asp

However, we urge you to consult your doctor to determine if this vaccine is right for you. Also read more about it at the manufacturer's website:

http://www.merck.com/product/usa/pi_circulars/z/zostavax/zostavax_ppi.pdf

Hard Sell to Medicare Insurance Buyers Would Get Softer Under New Rules

Hard Sell to Medicare Insurance Buyers Would Get Softer Under New Rules

The administration proposed to crack down on the aggressive marketing of private Medicare insurance plans by outlawing unsolicited visits and telephone calls to beneficiaries, regulating commissions paid to sales agents and increasing the fines that could be imposed on insurers. Medicare “should not be undermined by the actions of a limited number of unscrupulous sales agents,” said Kerry N. Weems, the acting administrator of the Centers for Medicare and Medicaid Services.

In the last two years, Medicare beneficiaries and state officials have often complained that high-pressure sales tactics led some people to sign up for unsuitable policies. After reviewing comments from the public, federal officials intend to issue final rules before the marketing of plans for 2009 begins this October. The administration’s view is that states do not have the authority to regulate the marketing of private Medicare plans.

The proposal would prohibit door-to-door marketing of private Medicare plans. Agents could not accost beneficiaries in the parking lot of a center for the elderly, a clinic or an apartment building. Agents could respond to telephone inquiries, but they could not make cold calls to beneficiaries. The rules would set a $15 limit on the value of gifts and promotional items offered to potential customers. Insurance companies could offer coffee, soft drinks, snacks, pill dispensers and water bottles worth less than $15. But insurers could not offer free meals, whatever their value. This proposal would end a common practice. Insurers like Humana have signed up many beneficiaries at family restaurants where the companies provide sales presentations and meals. “Have Lunch on Us!” said fliers and advertisements inviting Medicare beneficiaries to Humana events last fall.

The proposed rules would also prohibit agents from offering annuities, life insurance and other “non-health care related products” while selling private Medicare plans.

The administration also wants to regulate sales commissions, to discourage agents from switching people inappropriately from one Medicare plan to another. Under the proposal, the commission paid for the initial sale and first year of coverage could not exceed the commission paid for renewal of coverage in a subsequent year. Many carriers now pay higher commissions in the first year. Some pay only for the first year, with no commission in later years. This creates a “financial incentive for agents to encourage beneficiaries to change plans each year,” the administration said.

Of the 44 million Medicare beneficiaries, at least 25 million are in some type of private plan — either a Medicare Advantage plan, which provides a wide range of health services, or a free-standing prescription drug plan, which covers just medicines.

Source: New York Times

States Look to Rein In Private Medicare Plans

States Look to Rein In Private Medicare Plans

State officials will ask Congress for more power to regulate the marketing of Medicare Advantage and Prescription Drug plans because they are still receiving complaints of high-pressure sales tactics that have led some beneficiaries to sign up for unsuitable policies. Almost half of all Medicare beneficiaries are enrolled in one or both of these types of plans.

State insurance officials say they have received large numbers of complaints and have proposed that the Federal government set common standards for marketing the private plans, which could then be enforced by states. Congress will soon have an opportunity to tighten regulation of private plans as part of a bill setting Medicare payment rates for doctors and other health care providers. Unless Congress acts, doctors face a 10 percent cut in Medicare fees on July 1.

State officials say that federal payments to private Medicare Advantage plans have created a “tremendous incentive” for insurers to maximize sales by aggressive marketing, such as paying larger commissions and bonuses than agents would receive for selling other health insurance products. In 1990, Congress set tough standards for supplemental (Medigap) insurance, and that approach has worked relatively well. Senator Wyden of Oregon welcomed the proposal. “I helped write the 1990 law, which put an end to Medicare supplement insurance scams, but today some of the same deceptive practices have resurfaced in the marketing of Medicare Advantage.”

State officials also recommended that advertisements and marketing materials should specify the type of plan being offered, and avoid the use of confusing product names like “gold,” “silver” and “value,” which have no standard definition. They also recommend that when agents sell private Medicare plans, they should not be allowed to sell other insurance products such as annuities, life insurance, or long-term care to the same customer at the same time. Further, they recommend that when someone asks for information on a drug plan, they should not be pressed to buy a more comprehensive Medicare Advantage plan, which is more lucrative for the agent and the insurance company.

The administration and insurance industry have acknowledged problems in the Medicare market and have taken steps to curtail abuses. The Centers for Medicare and Medicaid Services sent “secret shoppers” to 240 marketing events last fall, and they found inaccuracies or omissions in three-fourths of the sales presentations. Further, two insurance industry trade groups have developed a training course for agents who market private Medicare plans.

Source: http://www.nytimes.com

Hard To Save Money With Chronically Ill

Hard To Save Money With Chronically Ill

A three-year experiment to see whether Medicare could prevent expensive hospital visits for people with chronic conditions like congestive heart failure and diabetes has suggested that such an approach may cost more than it saves. The program failed to meet the financial target of an overall savings to Medicare of 5%.

In the experiment, nurses periodically placed phone calls to patients to check whether they are taking their drugs and seeing the right doctors. The idea is that keeping people healthier can help patients avoid costly complications. But the preliminary findings indicate that the government is unlikely to save money. Medicare says the experiment has not reduced medical bills enough to offset the cost, as much as $2,000 a year for each patient.

Experts say that Medicare was too optimistic about how easy it would be to prevent costly complications and hospital visits by patients who are very sick. The experiment’s nurses spent most of their time on rudimentary issues, like directing someone to a specialist to get better care, although “numerous diabetics didn’t even know what an endocrinologist was.” Medicare signed up patients who were much sicker than they had expected, and most of the patients were already so ill that it was no longer a preventive program.

Some health care experts say Medicare should seek other ways of managing the care of the chronically ill, like the development of so-called “medical homes,” where a doctor with a team of other professionals oversees a patient’s care. A few doctors’ groups involved in a separate Medicare experiment have reported some

Whatever happens with this particular program, Medicare says it wants to keep experimenting. “We’re not giving up on this stuff,” said a Medicare spokesman. “We definitely want these programs to work.”

Source: New York Times

Heart Scans Still Covered by Medicare

Heart Scans Still Covered by Medicare

The federal government said it would continue to cover the use of an increasingly popular procedure to detect heart disease. The Centers for Medicare and Medicaid Services said it would continue to cover the scanning procedure, despite its earlier misgivings over whether there was enough evidence to justify paying for the tests under Medicare. The agency said that it would continue to leave payments for the scans up to the local insurance carriers it employs to oversee medical claims. Most local carriers have been covering the test, a form of CT scan that can cost $600 or more.

Medicare paid for roughly 70,000 of the heart scans in 2006, according to the agency, at a cost of $40 million to $50 million. For people not yet eligible for Medicare, thousands of other such scans were paid for by commercial insurers or from patients’ own pockets, at prices sometimes close to $1,000. As many as 1,500 centers around the country are estimated to be offering the scans, with some centers advertising their services.

The scans are now widely promoted as a noninvasive alternative to tests like angiography, which requires the insertion of a catheter into the blood vessels and can cost thousands of dollars. But conventional angiography is typically done only on patients with cardiac symptoms. There is growing concern that the CT scans are being done increasingly on those who show no signs of heart disease, subjecting them needlessly to radiation risks.

In December, the Centers for Medicare and Medicaid Services had said it would not pay for the scans unless patients were enrolled in a study to test the technology’s effectiveness. The proposal to curtail payments met with fierce resistance from doctors who perform these scans and companies that make the equipment. But the Centers for Medicare and Medicaid Services said there remained “uncertainty regarding any potential health benefits” from the scans and described the existing evidence as of “overall limited quality and limited applicability.”

Source: www.nytimes

Private Medicare Plans’ Cost Questioned

Private Medicare Plans’ Cost Questioned

In a report to be issued by the Government Accountability Office, Medicare Advantage plans (Part C) often cost beneficiaries more than the Original Medicare program (Parts A & B). While many Medicare Advantage plans advertise extra benefits and low costs, the investigative arm of Congress, says that many people higher costs for home health care, nursing homes and some hospital stays. About 20% of Medicare beneficiaries are in Medicare Advantage plans and Medicare estimates this will rise to 27% by 2017.

The report says that Medicare spends more per beneficiary in Medicare Advantage than it does for beneficiaries in Original Medicare, but administration officials and insurance executives say the private plans provide a bargain. “Medicare Advantage plans are offering an average of approximately $1,100 in additional annual value to beneficiaries in terms of cost savings and added benefits,” said Kerry N. Weems, the acting administrator of the Centers for Medicare and Medicaid Services. Moreover, insurers say co-payments and deductibles are generally lower in private plans than in traditional Medicare (on average about half of what they would have paid in Original Medicare).

But the Government Accountability Office said that in 2007, 19% percent of Medicare Advantage beneficiaries were in plans that projected higher cost-sharing for home health services, and 16% were in plans that projected higher cost-sharing for inpatient services. Further, while the Government Accountability Office found that nearly half of Medicare Advantage beneficiaries were in plans that had an out-of-pocket maximum, certain costs are not counted toward these out-of-pocket limits, such as the cost of some cancer drugs, some mental health services, and some home health care expenses.

Critics of private plans assert that they have higher marketing and administrative costs than traditional Medicare, but figures have been elusive. The accountability office found that private Medicare plans allocate about 87% of total revenue to medical expenses and about 9% to non-medical expenses like administration, marketing and sales. The remaining 4% is profit.

Insurers say that low-income people rely heavily on Medicare Advantage because it provides more comprehensive benefits than traditional Medicare, and they cannot easily afford supplemental policies. But the accountability office said the subsidies were not well focused. “If the policy objective is to subsidize health care costs of low-income Medicare beneficiaries,” the report said, “it may be more efficient to directly target subsidies to a defined low-income population than to subsidize premiums and cost-sharing for all Medicare Advantage beneficiaries, including those who are well off.”

Source: New York Times 2/28/08

Part D Premiums May Rise

Part D Premiums May Rise

President Bush has proposed legislation to increase prescription drug premiums for higher-income Medicare beneficiaries. The proposal was part of a broader package that is intended to rein in Medicare costs while advancing a larger private role in the health care system. Congress however is unlikely to approve the legislation, although with Medicare’s hospital insurance trust fund expected to run out of money by 2020, Congress will eventually need to consider such proposals.

The prescription drug proposal would create an income-linked system of premiums similar to the one already in effect in Medicare Part B. Prescription drug premiums would increase for any individual with income over $82,000 and any couple with income exceeding $164,000. Premiums would more than triple for many individuals with incomes over $205,000 and for many couples with incomes over $410,000. While current premiums vary by plan, the monthly premium for standard drug coverage is about $28 this year.

Initially, fewer than 5% of people with Medicare drug coverage would have to pay the higher premiums. But this proportion would grow because the income thresholds would remain the same, with no allowance for inflation.

Source: New York Times 2/16/08

Slower Growth in Medicare Spending

Proposed Federal Budget To Slow Growth in Medicare Spending

The proposed 2008 federal budget calls for slowing the rate of growth in expenditures for Medicare, as health care savings are a crucial part of the Administration’s plan to achieve a budget surplus by 2012. The President has repeatedly said that the cost of Medicare is unsustainable. Medicare and Medicaid combined account for nearly a quarter of all federal spending, and their combined cost is expected to double in a decade.

Budget documents show that the President will propose legislative changes in Medicare to save $6 billion in the next year and $91 billion from 2009 to 2013. Additionally, the President proposes to save tens of billions of dollars more through new regulations that are not subject to approval by Congress.

While Congressional Democrats have no reason to make unpopular cuts in this election year, lawmakers say they feel obliged to pass a Medicare bill in the first half of this year, to spare doctors from a 10 percent cut in Medicare fees that would otherwise take effect on July 1. Lawmakers say that bill could easily become a vehicle for other changes in Medicare.

Most of the Medicare savings in the budget would be achieved by reducing the annual update in federal payments to hospitals, nursing homes, hospices, ambulances and home care agencies. The budget would not touch payments to insurance companies for private Medicare Advantage plans.

In the next five years, the largest amount of Medicare savings would come from hospitals, with reductions in the annual updates for inpatient care; reductions in special payments to hospitals serving large numbers of poor people; reductions in capital payments for the construction of hospital buildings and the purchase of equipment, and; reductions in special Medicare payments to teaching hospitals.

Further, under the President’s budget, Medicare payment rates for nursing homes would be frozen in 2009, and payment rates for home health agencies would be frozen at current levels through 2013.

Source: New York Times January 31, 2008

http://www.nytimes.com/2008/01/31/washington/31budget.html?ref=us&pagewanted=print