Senior Service Marketers: It Pays to Understand What's Going on with Medicare Right Now!
1. FAST FACT
Only 25 percent of US retirees in 2009 say they are very confident that they will be able to cover the cost of medical expenses during their retirement, compared to 41 percent of retirees in 2007. (Employee Benefit Research Institute, The 2009 Retirement Confidence Survey: Economy Drives Confidence to Record Lows; Many Looking to Work Longer, April 2009)
2. CMS CUTS PAYMENTS TO MEDICARE ADVANTAGE PLANS
Private Medicare health plans will receive up to four or five percent cuts in Medicare subsidies under 2010 payment rates announced by the Centers for Medicare and Medicaid Services (CMS) on April 6, 2009.
The 2010 subsidy cuts are based on a legal formula linked to costs under Original Medicare and are designed to ensure that payments based on the health status of enrollees do not overpay private plans, which tend to have healthier, less costly enrollees than Original Medicare.
Currently, Medicare pays so-called Medicare Advantage plans 14 percent more on average then the program spends on people enrolled in Original Medicare. President Obama proposed changes to the payment formula in his administration’s budget which could save as much as $175 million over the next ten years.
Supporters of decreasing payments to Medicare Advantage plans believe these cuts will create significant government savings and force the plans to be more efficient in delivering care. Insurers argue cuts will force them to charge higher premiums to people with Medicare and offer fewer benefits.
3. INSURERS USE QUESTIONABLE TACTICS TO PRESERVE OVERPAYMENTS
America’s Health Insurance Plans (AHIP), the health insurer’s lobby, has ramped up efforts to advocate for preservation of overpayments to Medicare Advantage plans, according to Congressional Quarterly. AHIP is the group behind The Coalition for Medicare Choices, an organization that opposes the Obama Administration’s proposed cuts to Medicare Advantage plans.
AHIP is a national association representing nearly 1,300 health insurance companies. According to the Coalition for Medicare Choices website, the address for the Coalition is the same as AHIP.
The insurance industry-sponsored coalition hosts town forums around the country where it offers door prizes and free food for those who attend the events, according to The Eagle Tribune, a Lawrence, Massachusetts newspaper. At these events, attendees are asked to write letters to members of Congress and record videos in support of Medicare Advantage plans—plans run by AHIP’s members.
AHIP hired a consulting firm to generate “grassroots” support for Medicare Advantage plans. Recently, the firm tried to place letters to the editor of The Eagle Tribune, supposedly from older Americans, arguing against cutting overpayments to Medicare Advantage plans. However, when the paper contacted the individuals who allegedly authored the letters, those individuals stated they did not write them. The Eagle Tribune also received a phone call from a man claiming to be the grandson of an author of a letter, who asked if the paper planned to publish the submission. Upon further investigation, the paper discovered that the inquiry was from an intern for the consulting group who was in no way related to the individual whose name was on the letter, nor did the individual recall writing or sending the letter.
4. NEW CMS PILOT PROJECT AIMS TO REDUCE HOSPITAL READMISSIONS
The Centers for Medicare and Medicaid Services (CMS) announced a pilot program April 14, 2009 intended to eliminate preventable hospital readmissions. According to CMS officials, data shows that nearly one in five patients that leave the hospital will be readmitted within the following month, and that more than three quarters of those readmissions are potentially preventable.
The Care Transitions Project will take place in 14 communities around the country, including those in New York, Florida, Texas, Colorado and Washington, and will run through the summer of 2011. The project will rely on Quality Improvement Organizations (QIOs), which are groups in each state contracted by CMS to improve the quality and efficiency of care received by people with Medicare. CMS will use QIOs in participating communities to implement a customized local plan that will examine and address issues related to medication management, post-discharge follow-up, and care plans for patients who move across health care settings, for example from a hospital to a skilled nursing facility.
The pilot represents a new approach to systematic problem solving for CMS because it focuses on a more localized examination and solution to the hospital readmissions issue rather than a one size fits all answer, Barry Straube, the agency’s chief medical officer told Congressional Quarterly.
