Medicare Compliance & Reimbursement

Medicare+Choice plans that have been holding on in hopes of being saved by a prescription drug benefit have new reason for optimism. The good news: House leaders came to an agreement June 9 on a compromise drug plan in which Medicare beneficiaries would receive a new prescription drug benefit; the plan is similar to one devised by the Senate, and President Bush said he would sign the bill. The not quite so good news for M+COs: The proposed drug plan would give the same benefit to all benes, regardless of whether they are enrolled in Medicare+Choice or fee-for-service. That means that private plans who were hoping an Rx proposal would be stocked with incentives to push benes into private plans aren't getting everything they'd hoped for. Such a proposal would have been a huge boon to managed care, but it has been apparent for weeks that rural legislators, wary of the managed care plans that have abandoned many of their constituents in recent years, would not allow such a proposal to pass anyway. Nonetheless, the new proposal would still be a shot in the arm for M+COs, experts say. "This was a very encouraging week in terms of the political viability" of the reform and the odds of it being passed this year, says John Gorman of Gorman Health Group in Washington. The worst-case scenario for health plans would be for legislators to pass no Medicare reforms this session. So health plans should be pleased that something is at least in the works. Gorman says that the chances of Congress passing prescription drug legislation have now "increased 100 percent," but he adds that managed care organizations shouldn't celebrate yet. If something isn't passed by the end of August, then nothing will happen until 2005, as Congress would then decide to sit on the issue until after the next presidential election. Under the new proposal, benes who opt for drug coverage would pay a $35 monthly premium and a $250 deductible. The government would pay four-fifths of benes' medication costs up to a ceiling of approximately $3,450, after which benes would be on the hook until their catastrophic coverage kicks in.   Not Perfect for Plans, But Awfully Good As far as private health plans are concerned, the perfect proposal would be one which gives a markedly better benefit to benes who are in private plans, therefore encouraging more benes to join private plans, swelling plans' enrollment. But the proposal as it now stands still would offer substantial advantages for private plans, Gorman says.

Members of MedicareAdvantage - a revamped, drug-inclusive version of Medicare+ Choice - would only have a $400 deductible for Part A and Part B - that's less [...]