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Medicare News
Understanding of Medicare Advantage Private
Fee-for-Service Gained from New Report
Center for Medicare Advocacy finds problems with
access, consumer protections
May 24, 2007 – A timely new report from the Center
for Medicare Advocacy describes the Medicare Advantage Fee-for-Service
Plans, the rules and regulations in which they operate and compares
these to those for other Medicare Advantage (MA) plans. It also reviews
PFFS plans in three states and compares the cost-sharing expense with
traditional Medicare and with traditional Medicare plus a Medigap
policy.
"Enrollees in PFFS plans may not have the same
access to providers that they would have under traditional Medicare,
they lack notable consumer protections available under traditional
Medicare and under other Medicare Advantage options, and the cost of
services may be greater than under traditional Medicare," notes Vicki
Gottlich, a Senior Policy Attorney with the Center for Medicare Advocacy
and an author of the report.
Furthermore, says Gottlich, "PFFS plans, by their
very structure, undermine the traditional Medicare program that provides
the vast majority of Medicare beneficiaries with a reliable and
affordable health insurance plan in which almost all healthcare
providers in the country participate."
The report, Medicare Advantage Private
Fee-for-Service (PFFS) Plans: A Primer for Advocates, was prepared
by Marissa Gordon Picard, law intern, and Gottlich, in the Center's
Washington, D.C. office.
Medicare Private Fee-For-Service (PFFS) Plans
Medicare Part C, the Medicare Advantage (MA)
program, describes a number of private plan options for the delivery of
Medicare covered services. The fastest growing of these options are
private fee-for-service (PFFS) plans. According to a recent Kaiser
Family Foundation Report, 100 percent of Medicare beneficiaries in both
rural and urban counties have access to at least one PFFS plan, while 95
percent of all Medicare beneficiaries have access to other Medicare
Advantage options.
In addition to being the fastest growing of the MA
options, PFFS plans are the most overpaid. Average payments to PFFS
plans are 19% greater than what Medicare would pay for a PFFS plan
enrollee if the enrollee had remained in traditional Medicare. See
Weekly Alert, Medicare Overpayments to Private Plans, March 29, 2007,
http://www.medicareadvocacy.org/MA_Overpayments.htm.
The proliferation of PFFS plans is driven, in large
part, by the extra payments they receive. As reported in the New York
Times, the Wall Street Journal and other publications, the increased
enrollment in PFFS plans may result more from strong arm sales tactics
than from the improved quality of care provided by these plans.
PFFS Plan Pros and Cons
PFFS plans have been
touted by health insurance organizations as providing Medicare
beneficiaries with all the services of traditional Medicare - and
sometimes more - with fewer limitations than other MA plans impose on
the doctors and hospitals they can use.
"These claims are
incomplete and misleading," says Ms. Gottlich. It is true that PFFS
plans, like all MA plans, are required by law to provide all medically
necessary health care services covered by Medicare Parts A and B. And
PFFS plans do not restrict beneficiaries to a network of providers, but
allow enrollees to go to any Medicare-eligible doctor or hospital in the
United States that is willing to provide care and accepts the plan's
terms of payment.
"However," says Gottlich,
"Medicare-participating providers are permitted to refuse to treat PFFS
enrollees, so beneficiaries' access to services is not as broad as the
plans assert. In fact, a recent study found that PFFS enrollees have
experienced difficulty finding doctors who will treat them."
Moreover, whether a PFFS plan offers services
identical to those provided under traditional Medicare or covers
additional services as well, there is no limit on the premium the plan
can charge beneficiaries in addition to the Part B premium.
Although PFFS plans typically adopt Medicare
billing practices, a PFFS plan enrollee could potentially pay much more
for identical services than a beneficiary in traditional Medicare or an
enrollee in MA coordinated care (and without the benefits of
coordination of care present in the latter case). In addition, the PFFS
plan is permitted to charge deductible, co-payment and co-insurance
amounts different from those under Medicare and charge a premium for
"extra" benefits, including prescription drugs.
PFFS plans are also exempt from [certain]
patient-protective statutory and regulatory standards. For example PFFS
plans do not have to:
● Pay Medicare standard rates to providers;
● Secure agreements with a minimum number of
providers in an area to ensure beneficiary access to care;
● Establish a program to improve the quality of
care provided to enrollees;
● Undergo CMS review or negotiation of rates and
premiums;
● Offer prescription drug coverage;
● Submit negotiated drug prices to CMS;
● Require pharmacies dispensing covered drugs to
inform enrollees of the lowest-priced generic bioequivalent; or
● Establish a drug utilization management program
or medication therapy management program (MTMP) to reduce the risk of
adverse events.
>>
Center for Medicare Advocacy
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