[Congressional Record Volume 146, Number 132 (Thursday, October 19, 2000)]
[Extensions of Remarks]
[Page E1833]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 BLASTING STERLING PRIVATE FEE-FOR-SERVICE M+C PLAN FOR RISK AVOIDANCE

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                      Wednesday, October 18, 2000

  Mr. STARK. Mr. Speaker, I am outraged that the Sterling Life 
Insurance Company, which operates the only approved private fee-for-
service Medicare+Choice (M+C) plan, has established a benefit package 
for 2001 that is designed to enroll healthier patients and avoid sicker 
patients. For 2001, Sterling will require 50 percent copayments for 
home health services and durable medical equipment.
  What Sterling is doing is an unconscionable rip-off of sicker 
beneficiaries and the Medicare program itself. Home health and DME are 
services that are associated with sicker patients, who are also more 
costly, so Sterling is deliberately avoiding sicker, more costly 
patients.
  Under the Medicare law, M+C plans must provide all standard Medicare 
benefits, but are permitted to modify the cost sharing amounts for 
those services as long as the total actuarial value of the cost sharing 
does not exceed the total actuarial amount of the cost sharing in the 
traditional Medicare program. The Health Care Financing Administration 
(HCFA) must approve the actuarial value of the cost sharing, but has no 
authority under the statute to prevent M+C plans from tailoring their 
cost sharing amounts as they choose.
  I will introduce legislation to require HCFA to approve all cost 
sharing amounts of M+C plans and prohibit M+C plans from manipulating 
cost sharing amounts to avoid sicker patients. Sterling is saying that 
they are trying to avoid fraud, but clearly, they are deliberately 
seeking to enroll only healthier, more profitable patients, while 
avoiding sicker, more costly patients. Since the Republicans have 
slowed the implementation of risk-adjustment of payments to M+C plans, 
Sterling will be overpaid for the patients that it enrolls. This 
practice is an obscene rip off of Medicare and the taxpayers, and I 
will try to stop it. When the new Congress convenes in January, I will 
introduce legislation to give HCFA authority to approve all cost 
sharing amounts to prevent such blatant risk avoidance.

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