Fw: Issue 24, November 27, 2007

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Bob & Carole

Dad & Mom

Panama City, FL 32404

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volunteer, International Stills Disease Foundation Inc., 1123 S. Kimbrel Ave

Panama City, FL 32404. Thanks!

-- Issue 24, November 27, 2007

Welcome to MEDICARE WATCH, a biweekly electronic newsletter of the Medicare

Rights Center

Vol. 10, No. 24: November 27, 2007

Contents:

FAST FACT

MEDPAC: PRIVATE PLAN ENROLLEES IN POORER HEALTH

RISING HEALTH CARE COSTS THREAT TO MEDICARE

CALIFORNIA-BASED INSURANCE PLAN FINED $1 MILLION

CASE FLASH: NETWORK EXCEPTIONS

1. FAST FACT

The proportion of small companies offering employer-based health insurance

fell to 61 percent this year, down from 63 percent in 2006, according to a

recent report released by Mercer, a human resources firm (“U.S. Employers'

Health Benefit Cost Continues to Rise at Twice Inflation Rate, Mercer Survey

Finds,” Mercer, November 19, 2007).

2. MEDPAC: PRIVATE PLAN ENROLLEES IN POORER HEALTH

Health outcomes for Medicare private health plan enrollees are at their

lowest levels since quality reporting began in 1998, according to

Zarabozo, a researcher for the Medicare Payment Advisory Commission (MedPAC)

sparking concern among commission members that private plans are providing

substandard care to people with Medicare.

Zarabozo, who presented the data at a November 9 MedPAC meeting, provided

figures on the health status of plan enrollees from the most recent two-year

period available (2004-2006). During that period, 13 plans reported

enrollees' physical health as worse than expected, the most recorded in any

reporting period available. In the previous two reporting periods (2002-2004

and 2003-2005), no plans reported the physical health status of enrollees as

“worse” than national plan averages.

Mental health care fared no better. Only five plans reported enrollees'

mental health as “better than expected,” in contrast to 18 plans in

2003-2005. Seven plans reported mental health outcomes as significantly

poorer than the national average, the highest since plan performance data

was first gathered in 1998, when 15 plans reported substandard mental health

outcomes.

Medicare private plans also performed poorer than commercial or Medicaid

private plans on performance measures and health outcomes. According to data

collected by the National Committee for Quality Assurance, from 2005 to 2006

Medicare plans improved in only 7 of 38 reporting measures. During the same

period, commercial plans improved in 30 of 44 measures, and Medicaid private

plans improved in 34 of 43 measures.

Several MedPAC commissioners expressed concern over Medicare private health

plan performance, in part because private plans cost more than Original

Medicare. Commissioner Dr. Wolter summed up the group's reactions

by stating, “If we're going to pay for Medicare Advantage, we really want

not only reporting, but performance.”

Commissioners discussed a number of recommendations, such as linking plan

payments to performance results, providing performance data from Original

Medicare to aid consumers in plan choices, and extracting region-specific

data for more detailed analyses. The recommendations will be put to a vote

next month, when MedPAC will make formal recommendations to Congress.

3. RISING HEALTH CARE COSTS THREAT TO MEDICARE

The increasing cost of health care, driven primarily by the cost of emerging

medical technologies, is a greater threat to the financial sustainability of

Medicare than the aging of baby boomers, according to a recent Congressional

Budget Office (CBO) report.

The Long-Term Outlook for Health Care Spending, released this month by the

CBO, projects that medical coverage for a growing aged population will

account for only 25 percent of Medicare spending growth through 2030. On the

other hand, the rapid growth of health care spending, rooted in the rising

cost of medical technology and increased use of services, will account for

75 percent of Medicare spending increases through 2030, and 90 percent

through 2082.

The CBO predicts that by 2082 spending on Medicare and Medicaid alone could

account for one-fifth of the nation's gross domestic product. The

projections, which were 50 percent higher than those released by the

Medicare trustees, left federal regulations unchanged to demonstrate the

long-term fiscal effects of current Medicare and Medicaid policy, which the

report describes as “unsustainable.”

The CBO recommends expanding research on cost-effective care and

reimbursement methods that provide incentives for low-cost interventions and

penalize providers who opt for high-cost and unnecessary care. According to

Orszag, director of the CBO, between 5 and 50 percent of health care

spending could be eliminated without harming health outcomes, with 30

percent given as a common estimate.

In response to the report, Senator Max Baucus, Democrat of Montana, and

chairman of the Finance Committee, vowed to jump-start hearings on health

care costs and methods to overhauling the health system. He concluded that

“finding ways to make the health care system more efficient and

cost-effective will reduce costs for all health care users, public and

private, and . . . will pave the way toward getting Federal spending truly

under control.”

4. CALIFORNIA-BASED INSURANCE PLAN FINED $1 MILLION

On November 15, the California Department of Managed Health Care (DMHC)

fined Health Net, a California-based insurance company that covers nearly

240,000 people through Medicare Advantage plans, $1 million for linking

staff bonuses to terminating coverage for enrollees in its commercial plans.

According to recently released court documents, Health Net compensated

Barbara Fowler, a senior analyst, with $20,000 in bonuses for retroactively

rescinding individual and family health policies. Between 2000 and 2006,

Fowler personally cancelled 1,600 policies, exceeding monthly targets and

saving the company $35.5 million in medical expenses.

Although Health Net strove to keep the details of the bonuses confidential

to protect “proprietary information,” state documents were released as the

result of a recent court case. Patsy Gates, a former Health Net enrollee, is

suing the plan for $6 million in compensation and damages after her

individual policy was rescinded during post-surgery chemotherapy sessions.

Health Net claimed Gates, who suffers from breast cancer, provided an

incorrect weight on her application and did not disclose a heart problem

relating to prior use of Fen-Phen, a weight-loss drug linked to heart

disease and pulmonary hypertension. Gates claimed that a lackadaisical

broker, who performed an interview in the hair salon where she worked,

caused her to give incorrect or incomplete information. Health Net's policy

termination has left Gates with $200,000 in unpaid medical bills, as well as

a catheter in her chest from the interrupted chemotherapy sessions.

The DMHC fine is not the first action taken by the state for inappropriate

plan termination. The department recently fined Blue Cross of California $1

million and Kaiser Permanente $325,000 for illegally terminating individual

health insurance policies, and it continues to investigate Health Net, as

well as three additional companies that offer individual health policies in

the state—WellPoint, UnitedHealth, and Blue Shield of California.

5. CASE FLASH: NETWORK EXCEPTIONS

Mrs. L was enrolled in a Medicare private health plan. She had a severe form

of breast cancer and was receiving treatment from an oncologist who was in

her plan's network. In October, Mrs. L received a letter from her Medicare

private health plan informing her that starting November 1, the plan would

no longer consider her oncologist in network.

Mrs. L knew that she could change plans during the Annual Coordinated

Election Period (ACEP), which runs every year from November 15 through

December 31. However, if she changed plans her new coverage would not begin

until January 1. Mrs. L needed coverage for her oncology treatment through

the remainder of the year.

Mrs. L called the Medicare Rights Center and spoke with a hotline counselor.

The counselor explained that Medicare private health plans are allowed to

make changes to their network of doctors throughout the year. However, plan

enrollees also have a right to request an exception to the network

restriction.

The counselor told Mrs. L to ask for an “expedited review” by writing a

letter to the plan, requesting that it allows her to continue getting her

cancer treatment from the same oncologist at the in-network rate for the

rest of the year. The counselor also told Mrs. L to have her doctor write a

letter stating why continuity of care was important.

A few days after Mrs. L sent the letters to her private health plan, the

company agreed to allow her to continue to see her oncologist at the

in-network rate through the end of the year. Since the exception was only

for the remainder of the year, Mrs. L found a different Medicare private

health plan that would consider her oncologist in network for the following

year and enrolled in that plan during the ACEP.

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Medicare Watch is MRC's fortnightly newsletter, established to strengthen

communication with national and community-based organizations and

professional agencies about current Medicare policy and consumer issues.

Each edition contains news of recent policy developments affecting Medicare

and health care generally and a case story from our hotline that illustrates

steps professionals can take to get older adults and people with

disabilities the health care they need.

The Medicare Rights Center (MRC) is the largest independent source of

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MRC helps older adults and people with disabilities get good, affordable

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