(The writer is a Reuters columnist. The opinions expressed are
his own.)
By Mark Miller
CHICAGO, April 26 (Reuters) – In Garrison Keillor’s Lake
Wobegon Days, all the children are above average. In Washington,
the same impossible math is being applied to Medicare’s
managed-care insurance plans.
The Affordable Care Act (ACA) includes funds to pay special
bonuses to Medicare Advantage plans offering above-average
quality of care. Instead, the Obama Administration is paying the
bonuses to nearly all Advantage plans, including a majority that
are rated just average.
The U.S. Government Accountability Office (GAO) issued a
report this week castigating the administration for wasting more
than $8 billion over ten years on the bonus program, and
recommends that it be canceled. The bonus program also has been
criticized by another non-partisan Congressional watchdog, the
Medicare Payment Advisory Commission (MedPAC).
Advantage is a fast-growing privatized insurance option that
seniors can select instead of traditional fee-for-service
Medicare. Most are health maintenance organizations or preferred
provider organizations, and they have grown rapidly in recent
years by bundling all-in-one medical and prescription drug
services.
The plans get higher reimbursements from Medicare than
fee-for-service providers – 14 cents on every dollar before the
ACA was passed. The plans are required to use the higher
reimbursements to offer lower premiums and extra benefits to
seniors.
The ACA is funded, in part, through savings from the phasing
out of those extra payments. But the blow to insurance companies
is cushioned by a new system of bonus payments rewarding plans
that achieve better than average quality.
The quality bonuses were to be paid only to above-average
plans starting this year, and ramped up over time. Instead, the
U.S. Department of Health and Human Services put in place a huge
quality demonstration program that has resulted in quality bonus
payments to 91 percent of plans. In comparison, just 25 percent
of plans would have received bonuses under the statutory
provisions of the ACA, according to MedPAC.
Previous GAO and MedPAC reports have criticized the program
for poor quality care, and for retaining more profit – and
spending less on patients – than they had promised in their bids
to Centers for Medicare & Medicaid Services, the federal agency
that administers Medicare.
CMS uses a rigorous system of quantitative measures to
evaluate key areas of plan quality, including preventive care,
chronic disease management, prescription drug plan management
and responsiveness to patients.
Plans can receive up to five stars from CMS, and the ratings
are available to seniors shopping for coverage. This year, the
Kaiser Family Foundation reports that only 26 percent of the
Advantage plans are rated above average or excellent; 59 percent
are rated average, and nine percent receive less-than-average
scores.
Most of the above-average plans are found on the west and
east coasts, according to Kaiser. Not-for-profit Advantage plans
tend to get higher ratings than for-profits.
“The large firms are focused much more on quality, now that
it’s tied to bonus payments,” says Gretchen Jacobson, policy
analyst at Kaiser. “It’s made them pay attention.”
Seniors who enroll in four or five-star plans likely will
see more extra benefits in the years ahead. And, while an
Advantage plan will save money for some seniors, it’s important
to review the plan’s network of doctors to make sure yours are
in the plan. Also pay close attention to the plan’s co-pays,
co-insurance, and deductibles for in-network and out-of-network
care.
Pay particular attention to the drug coverage offered by
Advantage plans. Because Advantage plans are responsible for all
aspects of a patient’s care, some offer enhanced drug coverage
that might help save them money elsewhere.
But make sure your drugs would be covered by a particular
plan, and whether any restrictions are placed on that coverage.
Also pay attention to prices for your particular medications
across the entire year of coverage, and delivery costs.
(Editing by Linda Stern and Jilian Mincer. Desking by
Bernadette Baum)
