Senior Advocates Petition Congress to Cut Subsidy to Private Medicare Plans

Medicare reforms being shaped in Senate Finance Committee
Dec. 5, 2007 – Two Medicare advocacy groups poured 48,000 petitions on Congress yesterday as part of their campaign to support Medicare reforms that will halt or reduce the subsidies paid to private Medicare providers. The senior citizens also waived two-dollar bills to symbolize the “extra money” they pay each month in Medicare premiums because of these industry subsidies.

The National Committee to Preserve Social Security and Medicare (NCPSSM) was joined by the Alliance for Retired Americans in delivering the petitions yesterday.

The Senate Finance Committee is considering legislation this week that could include cuts to billions of dollars in subsidies to private insurers. These overpayments will cost the federal government $149 billion dollars over the next decade and cut two years from Medicare's solvency, according to the NCPSSM.

The NCPSSM news release also said, “Seniors want Congress to reduce those subsidies to improve and strengthen Medicare for future generations. Contrary to what the insurance industry claims, cutting industry subsidies is not the same as cutting Medicare.”

"While the President chides Congress for 'wasteful Washington spending', at the same time he and his allies continue to defend providing billions of dollars in subsidies to the insurance industry,” says Max Richtman, NCPSSM Executive Vice President

“Taxpayers and seniors should not have to foot the bill for overpayments to an industry already seeing record profits thanks to the privatization of Medicare. The Medicare Advantage program is the textbook definition of 'wasteful Washington spending' and should be reformed.”

In explaining the $2 bills, Edward F. Coyle, Alliance for Retired Americans Executive Director, said, "While each $2 bill may seem minor on its own, the total cost is significant. And so is the total effect on seniors. Each month, private insurance companies keep getting more, while seniors keep getting less.”

Earlier this fall, National Committee members and supporters mailed 73,000 letters to Congress requesting Medicare improvements. Several other petition drives and member surveys on Medicare are currently underway for delivery to Congress later this year or early 2008, according to NCPSSM.

Editor’s Notes:

The National Committee says it is a nonprofit, nonpartisan organization that acts in the interests of its membership through advocacy, education, services, grassroots efforts and the leadership of the Board of Directors and professional staff. The work of the National Committee is directed toward developing better-informed citizens and voters.


Medicare Package Taking Shape in Congress, HHS Secretary Makes Requests
Senate Finance Committee taking the lead on Medicare reform

Dec. 4, 2007 - HHS Secretary Mike Leavitt on Monday issued a statement to Congress requesting that Medicare legislation not include cuts to Medicare Advantage plans or changes to the Medicare prescription drug benefit, CQ Today reports. Leavitt in the statement said, "Both have proven to be highly popular with the American people and worthy of continued support from Congress."

A mark up of the Medicare package is tentatively scheduled for Wednesday, but the Senate Finance Committee might delay the mark up by at least one day, according to a spokesperson for committee ranking member Chuck Grassley (R-Iowa) (Armstrong, CQ Today, 12/3).

MA plan payments on average are 12% higher than traditional Medicare. The Senate Medicare bill is expected to reduce some additional payments to MA plans to generate revenue, while the House measure would make MA payments equal to traditional Medicare to generate $50 billion over five years.

The Bush administration last week during a meeting with Senate Finance Committee staffers said that it also opposes a provision of the Medicare legislation that would give states more power to penalize private MA plans that use questionable marketing tactics.

According to CongressDaily, "The White House's protest came as a surprise to negotiators, who inserted the new marketing language in response to reports that private [MA] plans were using misleading marketing tactics to get seniors to switch from traditional Medicare by enrolling in the private fee-for-service plans." The package, which could be released as early as Tuesday, would curb a scheduled 10% cut to physician reimbursements. It also is expected to have provisions that change the drug benefit and create rural and low-income subsidies.

Health IT

Leavitt also said that "any new bill should require physicians to implement health information technology that meets department standards in order to be eligible for higher payments from Medicare" (Johnson, CongressDaily, 12/4).

Leavitt said Congress should require physicians to adopt health IT that meets federal standards before it stops a scheduled 10% cut in Medicare physician fees. "Such a requirement would accelerate adoption of this technology considerably and help to drive improvements in health care quality as well as reductions in medical costs and errors," according to Leavitt.

He added, "I'm confident that many members of Congress are of a like mind of this issue, and I will actively work with them in the near future" (CQ HealthBeat, 12/3).

According to the AP/Philadelphia Inquirer, health care analysts have said widespread use of electronic health records will reduce medical errors and could help reduce health care costs. Currently, only 10% of small-group practices and solo physicians use EHRs, the AP/Inquirer reports. The systems can cost anywhere from $20,000 to $40,000 up front, according to the AP/Inquirer (Freking, AP/Philadelphia Inquirer, 12/3).

Sen. Edward Kennedy (D-Mass.) has sponsored a health IT bill (S 1693) that he is trying to get passed before the end of the session, but the Finance Committee has not discussed health IT as part of the Medicare package, CQ Today reports (CQ Today, 12/3).

E-Prescribing

Sens. John Kerry (D-Mass.) and Debbie Stabenow (D-Mich.) plan to introduce stand-alone legislation this week that would require handwritten prescriptions be replaced by electronic prescriptions, but the senators are working with Finance Committee Chair Max Baucus (D-Mont.) and Grassley to add the requirement to the Medicare package, aides said, CongressDaily reports.

The American Medical Association is "wary of an e-prescribing mandate," and its main priority is reversing the 10% physician payment cut, according to CongressDaily.

The Finance Committee package would include one-time payments for physicians to cover the start-up costs and small incentive payments to continue using the systems over three years. Switching to e-prescribing would cost about $2,500 plus losses in productivity during the transition, CongressDaily reports. After three years, physicians would be penalized for not using e-prescribing. Using the technology would save between $5 billion and $15 billion over 10 years, according to some estimates.

"Physicians are eager to adopt new technologies that have the potential to increase patient safety and quality of care, but hitting doctors with an unfunded e-prescribing mandate at the same time the government plans to cut Medicare physician payments 10% next year is untenable," AMA Board Chair Edward Langston said (Johnson [1], CongressDaily, 12/3).

Other Provisions

The Finance Committee has stalled negotiations on a provision of the package that would extend the length of time employers must cover kidney dialysis for employees after a business coalition ran advertisements in a Montana newspaper opposing increased responsibility for employers, according to an aide familiar with the negotiations, CongressDaily reports.

The ad ran in the Billings Gazette and was paid for by the Employers Coalition on Medicare. Under current law, employees with group insurance must receive 30 months of dialysis before Medicare coverage begins. The extension would increase the requirement to 42 months, which would save Medicare $1.2 billion over 10 years, according to the Congressional Budget Office.

Employers say that the change would cost them $3 billion to $4 billion over 10 years because they do not have the purchasing power Medicare has. Baucus was considering removing the requirement from the legislation, but he might be "less inclined to sympathize" with the coalition after the ads ran, according to CongressDaily (Johnson [2], CongressDaily, 12/3).

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