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