[Congressional Record Volume 145, Number 18 (Tuesday, February 2, 1999)]
[Extensions of Remarks]
[Pages E97-E98]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  THE MEDICARE+CHOICE IMPROVEMENT ACT

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                       Tuesday, February 2, 1999

  Mr. STARK. Mr. Speaker, I rise today with a number of my colleagues 
to introduce The Medicare+Choice Improvement Act. I don't need to tell 
you that the large number of Medicare+Choice plan terminations this 
past year was a real shock to many of our Medicare beneficiaries. In a 
number of communities, beneficiaries are left with fewer affordable 
coverage options in Medicare.
  We should take immediate steps to make changes to the Medicare+Choice 
program that will protect beneficiaries when health plans leave the 
program, and we should make certain improvements that will aid health 
plans' abilities to project costs and continue as Medicare providers. I 
disagree with assertions that the only way to do this is to throw more 
money into the Medicare+Choice program and will oppose efforts of that 
nature.
  History always has had a way of getting distorted and the 
Medicare+Choice program is a fine example of that happening. Let us 
remember, the Medicare+Choice program was created as part of the 
Balanced Budget Act. In other words, the purpose of creating the 
Medicare+Choice program was to save money in the Medicare program.
  We have known for years that our payment system for Medicare managed 
care plans overcompensated them for the risk of the patients they were 
insuring. Medicare HMOs have historically insured younger, healthier 
seniors. Because Medicare's payment to managed care plans was based on 
the average fee for service payment in the county, the HMO payments 
were higher than appropriate. We also know that there are a number of 
other ways in which we are still overcompensating Medicare managed care 
plans. A chart highlighting these current overpayments is attached.
  So, rather than rewrite historical evidence to advocate increased 
funding of the Medicare+Choice program, I have put together The 
Medicare+Choice Improvement Act to make important consumer protection 
improvements in the Medicare+Choice Program. The bill would:
  Broaden consumer protections so that beneficiaries can leave health 
plans that have announced that they are terminating Medicare 
participation and join another Medicare+Choice plan to purchase a 
Medigap policy;
  Provide new protections for Medicare's disabled and ESRD patients.
  Prohibit door-to-door cold-call marketing of Medicare+Choice plans to 
seniors;
  Protect state efforts to provide comprehensive prescription drug 
benefits to their seniors;
  End Medicare+Choice plans' abilities to gerrymander their Medicare 
service areas in comparison to their commercial business;
  Require HCFA to calculate the portion of beneficiaries in a region 
receiving services through VA or DOD;
  Require the NAIC to reconfigure the Medigap policies so that they 
better meet the needs of today's Medicare beneficiaries.
  On the health plan side of the equation, my legislation would take 
care of one of their most pressing concerns: it would move the ACR 
submission date (the date that health plans must submit their pricing 
and benefit data for the following year to HCFA) from the current date 
of May 1 to July 1. This would give health plans two additional months 
to compile necessary data for the upcoming year. This might not move 
the date as far as health plans would like, but there are serious costs 
to move the date further in the year. As one example, moving the date 
any later would seriously jeopardize the ability of HCFA to prepare the 
``Medicare&You'' beneficiary handbook which is mailed to seniors each 
year.
  On the topic of risk adjustment, I think that HCFA's proposal to 
phase-in risk adjustment over the next five years is just too long. We 
have solid evidence that Medicare managed care plans have been 
enrolling healthier patients and making more money off of them because 
of that fact (again, see the attached chart). The hospital-based risk 
adjustment proposed by HCFA is a first step toward fixing this 
inequity. It would finally put in place a financial incentive to enroll 
less healthy beneficiaries. We need to be moving forward as quickly as 
possible with this mechanism. I do concede that a phase-in approach is 
appropriate, but my legislation would have that phase-in occur over 
three years rather than five.

[[Page E98]]

  We have an opportunity this year to make improvements to the 
Medicare+Choice program that will protect beneficiaries when health 
plans make business decisions about whether to continue participating 
in Medicare. This bill makes those improvements without senselessly 
increasing Medicare expenditures on a program that already costs more 
than traditional Medicare. I look forward to working with my colleagues 
to make these important, reasonable, and necessary fixes to the 
Medicare+Choice program.

           CURRENT MEDICARE OVERPAYMENTS TO MANAGED CARE PLANS
                   [Prepared by Rep. Pete Stark staff]
------------------------------------------------------------------------
      Source of overpayment        Cost to medicare   Source of analysis
------------------------------------------------------------------------
Overpayments due to BBA change    $800 million in     Congressional
 that removed HCFA's ability to    1997.               Budget Office.
 recover overpayments when        $8.7 billion over
 health care inflation is lower    5 years.
 than expected.                   $31 billion over
                                   10 years.
Overpayments due to lack of risk  5-6% overpayment    Physician Payment
 adjustment.                       to HMOs per         Review Commission
                                   beneficiary who     (now MedPAC) 1996
                                   is enrolled.        Annual Report.
Overpayments due to inflation of  More than $1        HHS Office of
 Medicare's share of plan          billion annually.   Inspector General
 administrative costs.                                 July 1998.
Overpayments due to inclusion of  7% annual           HHS Office of
 fraud, waste and abuse dollars    overpayment.        Inspector General
 from FFS payments. Managed care  Annual savings       Sept. 11, 1998.
 plans should better ``manage''    with a corrected
 and therefore avoid such fraud,   1997 base year
 waste and abuse.                  would be:.
                                    $5 billion in
                                   2002.
                                    $10 billion in
                                   2007.
------------------------------------------------------------------------

                                                       

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