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According to a study published in PLoS Medicine, the government’s plan to implement a pay-for-performance system for Medicare would lead to greater inequality among hospitals in rich and poor areas. The study analyzed 2,700 hospitals from 2004 to 2007. Each hospital was assigned a baseline score based on a number of factors in accordance to the system the government is planning to use. The report found that hospitals in richer areas received better baseline scores than those in more disadvantaged areas. The report concluded that in general, hospitals’ performance increased over time with a pay-for-performance system, but the benefits and level of performance increases were much smaller for hospitals in disadvantaged areas.

The reason for this according to the report is that the pay-for-performance system gives hospitals with lower baseline scores less credit for performance improvements. So hospitals in disadvantaged areas must essentially achieve greater improvements than “richer” hospitals to receive the same amount of payments from the government.

The problem of course is that poorer hospitals have fewer resources to start with, so it is very difficult for such hospitals to close the performance gap with their better funded competition. Those hospitals with greater resources will have better performance thereby receiving the majority of government funding.

The report states that the Centers for Medicare and Medicaid Services has acknowledged that pay-for-performance could worsen the disposition of resource-strapped hospitals, but has taken a wait-and-see approach to see if that will be the case. For more information on the report click here.

New National Health Insurance Website Goes Live

If you haven’t already heard, you may be interested in knowing that the Health and Human Services Department has launched HealthCare.gov that offers consumers a central place to learn about all their insurance coverage options. HHS Secretary Kathleen Sebelius announced yesterday that this site is the first central database of health coverage options, including Medicare, Medicaid, and the Children’s Health Insurance Program. It also includes information from plan information from private insurance carries for small businesses and individuals. According to HHS, the new website offers billions of health care choices through its finder function. Check it out here.

SEC Investigates Major Home-Health Companies for Medicare Fraud

Amedisys, Inc., the largest U.S. home-nursing provider, and Almost Family, Inc., the fourth-largest, both recently announced that they are under investigation by the SEC. In May, following a Wall Street Journal article that identified irregular reimbursement patterns, the U.S. Senate Finance Committee said it was analyzing whether the home-nursing industry manipulated the number of visits made to patients to inflate government reimbursement payments. According to Businessweek, the recent announcements signal that the analysis is expanding and may even include more companies. With the announcements, most publicly traded home-health companies are seeing the value of their stock significantly decline.

Sources: KHN, NPR, Businessweek, Wall Street Journal, PLoS Medicine

A The Henry J. Kaiser Family Foundation released a report that provides an analysis of Medicare Advantage enrollment trends among HMOs, PPOs, and PFFS plans.  The report highlights that 11.1 million people were enrolled in private Medicare Advantage plans as of March 2010.  This is an increase from 10.5 million in March 2009.  The report showed that this increase took place despite a reduction of available plans throughout that same period. 

The report also found that three or fewer insurance companies dominate the Medicare Advantage market in every state except New York.  In 14 states, one company enrolls more than half of all Medicare Advantage customers.  Nationwide, both UnitedHealth Group and Humana Inc. control 33% of the total Medicare Advantage enrollment nationwide. 

For the full report follow this link: http://kff.org/medicare/upload/8080.pdf

Medicare Doc Pay Cuts Expected to be Delayed Today

Last night, the House of Representatives voted 417-1 to approve a Senate bill that delays a 21% cut in Medicare payments to doctors.  The bill delays the cuts another six months.  Lawmakers will work on a more permanent solution in that time, but if history is any indication, a permanent solution isn’t coming anytime soon.  Obama has expressed his approval of the bill and is planning to sign it into law today. 

The Medicare doc pay cut delay was a part of a larger bill that included unemployment benefit extensions and more aid to states.  When that bill was filibustered by Republicans, Democrats separated the Medicare doc pay cut delay into its own bill.  Now the hope is that the much more expensive, permanent solution can be passed after congressional elections in November.  The bill being signed today will increase payments to providers by 2.2% and will be paid for with a series of health care and pension changes.

Medicare and Medicaid Implements New Fraud Mapping Tool

The Centers for Medicare & Medicaid Services (CMS) implemented a new fraud mapping tool that will eventually be used throughout all government agencies.  The fraud mapping tool was developed by the Recovery Accountability and Transparency Board to collect massive amounts of information in real time, analyze the data for fraud trends, and then project possible fraud or errors using an array of indicators.  This new tool comes on top of the “Do Not Pay” list created last week.  Both methods aim to achieve President Obama’s goal of cutting improper Medicare payments in half by 2012.

Sentinel Life Medicare Supplement Plan N Approved in CA, IA, and LA

Sentinel Life Medicare Supplement Plan N has been approved for Louisiana, Iowa, and California.  Each of these plans offer competitive rates and generous commissions.  To learn more about these products click here.

Sources: AP, NPR, KFF, KHN

As part of a series of government spending cuts, President Obama today will announce that all federal agencies must create a national “do not pay list.”  The goal of this list is to reduce the likelihood and impact of fraud.  The list will identify people and organizations whom are ineligible to receive government benefits, contracts, grants, and loans.  The Treasury Department, General Services Administration, and Office of Management and Budget will work together to create a database of dead people, delinquent or jailed contractors, and other debarred or suspended firms. 

In addition to contributing to the creation of the “do not pay” list, CMS will implement an online fraud-detection program that will keep a close watch on medical providers and conduct deeper background checks.  According to the Washington Post, CMS made $65 billion in erroneous payments in 2009. Additionally, CMS must cut at least five percent from its budget to meet President Obama’s budget cutting goals.

The Obama administration is also seeking out additional discretionary funding for the HEAT program.  According to the Justice department and the department of Health and Human Services, the Health Care Fraud Prevention and Enforcement Action Team (HEAT) has experienced much success in fighting Medicare and Medicaid waste, fraud, and abuse in its first year.  One highlight mentioned by the Justice department is that Medicare claims and payouts for medical equipment used in the home decreased significantly after HEAT arrested and prosecuted a number of criminals in South Florida where health fraud is rampant.  The Obama administration wants to capitalize on the early success of the HEAT program by expanding it to a total of 20 teams by the end of 2012.
  

Still No Medicare Doc Pay Fix

“Tonight, every single Republican voted to give doctors a 21% pay cut,” said Senator Harry Reid after the defeat of a recent bill on Thursday that contained provisions to delay Medicare reimbursement cuts and the extension of jobless benefits.  Republicans and even several moderate Democrats are calling for the bill to be paid for with cuts to other government programs and won’t vote for it until it is.

Recent Modernized Medicare Supplement Approvals

• Sentinel Life’s Plan N is now approved in California.
• Gerber Life’s Modernized Medigap Plans (excluding M & N) are now approved in California.
• Sentinel Life Medigap Plan N now approved in Iowa.
• Mutual of Omaha Modernized Medigap Plans N and M now approved in Florida.

For a list of plans in your state, see our modernized med supp approval chart.

Sources: Washington Post, Federal Times, AP

In another sign that Medicare Advantage is falling by the wayside, yesterday CIGNA announced it will not offer CIGNA Medicare Access (PFFS), its individual private fee-for-service medical plan, in 2011.  Customers of these plans will experience no change for this year.  CIGNA will continue to serve its clients, brokers, health care professionals, and contractors into 2011 for 2010 claims.  Now that CIGNA PFFS customers will need to choose a new medical coverage option for 2011, this presents a great opportunity to promote Medicare supplements to them, especially Medicare Supplement Plan N.

Medicare Checks Sent Out to Seniors
As posted on our Twitter feed earlier this week, the Obama administration started sending out $250 checks to seniors who fall into the Medicare prescription drug doughnut hole.  With elections looming on the horizon, Democrats are touting the checks as the first of many benefits to come from health care reform legislation signed into law earlier this year (PP&AC Act).   In some states, Democrats are buying air time to broadcast a 60-second television ad stating how Republicans promised to repeal the healthcare reform bill.  Democrats also sent boxes of “GOP Doughnut Holes” to various media outlets as a sign that the doughnut hole rebate benefit would not exist under GOP leadership.  Of course, as you may already know, in most cases, the $250 is only about 1/14 of the total $3,610 hole. 

Infection Control a Major Issue at Medicare ASCs
Earlier this week, the Journal of the American Medical Association published a new study from the Centers for Disease Control and Prevention (CDC) and the Centers for Medicare and Medicaid Services (CMS), that found 2/3 of ambulatory surgical centers (ASCs) in three states experienced infection control lapses.  CMS defines ACSs as facilities that operate exclusively to provide surgical services to patients who do not require hospitalization or stays in a surgical facility longer than 24 hours.  Roughly 70 ASCs that experienced the infection control lapses serve Medicare patients.  The lapses were typically found in process including hand washing, injection and medication safety, and equipment reprocessing.  To view a video overview of the report click here.

AMA Unleashes its Wrath on Congress for Neglecting Medicare
Due to a glitch with our e-mail system last week, many of you missed last week’s article.  To view that article, click here.

Reminder: Modernized Plan Approvals Info
We just wanted to provide you with a friendly reminder that we offer three methods for checking out the latest modernized plan approvals.   First, we post updates immediately to our Twitter feed, second we post the update to our approval chart, and third if a carrier’s plan is new to the state, we’ll add it to our product availability map.  When it comes to modernized plan info, at PSM we’ve got you covered.

Sources: Reuters, Politico, CNN, JAMA, NPR

You may have read on other blogs that the doctor fix is in, but it’s not. The House of Representatives voted last Friday on May 28 to freeze the scheduled Medicare payment cut until 2011, however the U.S. Senate failed to pass the bill before going on a week-long Memorial Day break.

The 21% Medicare payment cut took effect June 1, but the Centers for Medicare and Medicaid Services (CMS) ordered a temporary freeze on doctor payments, giving Congress time to retroactively approve the bill that freezes the cut.

In response the American Medical Association (AMA) launched a multi-million dollar series of advertisements that will appear in newspapers, radio, and television. The ads aim to pressure senators to pass the bill as soon as possible by criticizing them for taking a vacation while more than 40 million seniors and millions of health care providers are left worrying about the future of their healthcare and businesses respectively. The AMA also hopes to further its goal of getting the government to pass a permanent fix by changing the current Medicare payment formula. Such a fix would cost an estimated $250 billion over ten years, which is why the Senate continues to repeatedly delay the cuts rather than address the root cause of the problem.

Various news outlets, such as Reuters are reporting that some doctors are no longer taking new Medicare patients due to the volatility of the situation.

Ironically, the Medicare payment cut also impacts TRICARE (the health program for military families), as it utilizes the Medicare payment formula. Looks like our Senators celebrated Memorial Day a little too quickly.

The AMA has set up a web page titled "Medicare Payment Action Kit." You can view many different documents it has created on the whole issue. Check it out here.

Starting in the fall of 2011, the Annual Election Period (AEP) will take place beginning October 15 and run through December 7.  This is a change from the current schedule of November 15 to December 31.  

Then on January 1, 2011, the Open Enrollment Period (OEP) will be eliminated.  As many of you already know, this period allowed beneficiaries to switch between “like” plans from January 1 to March 31 each year.

Also in 2011, the first Baby Boomers start to age into Medicare. There are 45 million Medicare eligibles in the country today, and by 2020 that number will grow to over 60 million. If you have any questions regarding these changes, please call us at 1-800-998-7715 or e-mail to info@psmbrokerage.com.

Source: Bravo Health

According to Mark Farrah Associates, a healthcare data aggregator and publisher, the number of newer policies issued over the last three years increased by 1.25% in 2009 when compared to the 2008 base. MFA reports that this continued growth of the Med Supp market is an encouraging sign for Medigap-based organizations looking to capitalize on the new modernized plans taking effect June 1, 2010.

The MFA article also provides other updated Med Supp information from 2009, such as breakdowns of Plan popularity (Plan F still rules), number of carries and plans, premium and claim amount comparisons, and overall carrier market share. Click here to view the article in its entirety.

Many Seniors not in the Best Medicare Advantage Plans

A study released by Avalere Health, a major consulting firm, reports that 47% of seniors on Medicare are in MA plans that rate three or two stars on Medicare’s quality rating scale. Three stars equal medium quality, and two stars equal fair quality. Also, only 23% of seniors on Medicare were enrolled in four to five star rated plans. According to Avalere, these quality ratings will become much more important due to the new health care law passed, as Medicare payments will now be tied to quality. More specifically, beginning in 2012, the new health care law mandates Medicare to award bonuses to four star or better plans. Click here for the full article.

Independent Payment Advisory Board (IPAB) to Cap Medicare Spending

James Capretta of the Ethics and Public Policy Center says “Medicare spending is now officially capped.” He points out that the IPAB, a 15-member independent panel appointed by the president and confirmed by the Senate, is responsible for enforcing an upper limit on annual Medicare spending growth. Mr. Capretta goes on to give a good, thought-provoking assessment of the impact the IPAB will have on the Medicare market.

He is generally against using payment cuts as a way of addressing Medicare’s rising costs stating “Certainly, more of the same payment rate reductions will not do it. Medicare’s chief actuary has already said that the payment cuts in the health reform law are unsustainable because they don’t change the cost structure for those providing care. In a very real sense, seniors will be the ones holding the bag from these cuts when they can’t access care due to a lack of willing suppliers.” Read the full article here.