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Medicare AdvantageFeatured Health Business Daily Story September 30, 2008 New Reports Criticize Medicare Part D Marketing, CMS Oversight and 'Extra' Pay Received by Medicare Health Plans Reprinted from MEDICARE ADVANTAGE NEWS, biweekly news and analysis on the Medicare (and Medicaid) managed care programs. By Judy Packer-Tursman, Editor, (tursman@comcast.net) Two reports released in the early days of September criticized private Medicare plans. A Sept. 5 report sponsored by The Commonwealth Fund cited what it called "extra" payments to Medicare Advantage (MA) plans totaling $8.5 billion in 2008. And a Sept. 4 report from the HHS Office of Inspector General (OIG) concluded that marketing materials of stand-alone Prescription Drug Plans largely failed to meet federal guidelines and described CMS oversight of PDP marketing materials as limited. According to OIG's report, 85% of reviewed PDP marketing materials failed to meet at least one element of CMS's guidelines. Also, OIG said, CMS did not complete a retrospective review of 2006 "file & use" marketing materials until April 2008 and, while CMS completed standard reviews of marketing materials in a timely manner, the reviews lacked consistency across regions. The OIG concluded that CMS's model documents were inconsistent with its marketing guidelines. CMS responded to OIG that it had implemented steps to improve its oversight of marketing materials. It identified seven areas for improving the review process, including developing standardized review protocols for reviewers. In a separate analysis of MA plan payments, Brian Biles, a professor of health policy at George Washington University who has issued similar reports for many years, estimates that extra payments to MA plans will reach $986 over fee-for-service (FFS) costs for each MA enrollee, totaling more than $8.5 billion in 2008 - and up from $3.9 billion in extra payments, or $795 per MA enrollee, in 2004 (see charts, below). According to Biles' analysis, MA plans will be paid an average of 12.4% more per enrollee in 2008 than what an enrollee in FFS would have cost. He estimates that even if payment reductions to MA plans mandated by the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) — scheduled to take effect starting in 2010 — had been fully implemented in 2008, MA plans still would have been paid 10.6% more than expected FFS costs. See the OIG report at http://www.oig.hhs.gov/oei/reports/oei-01-06-00050.pdf
and Biles' report at http://www.commonwealthfund.org/publications/
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