By John Reichard, CQ HealthBeat Editor

November 8, 2007 -- A key federal advisory panel debated strategies Thursday to boost enrollment in programs that pick up Medicare's out-of-pocket costs, including having Social Security offices enroll eligible seniors in "Medicare Savings Programs," which pick up some or all of Medicare's premiums and that may pay its deductibles and co-insurance costs.

Medicare guarantees universal coverage of the elderly, but even so, many seniors go without needed care because they don't have enough money to pay costs not picked up by the program. And to the extent they qualify for government programs that pick up some or almost all of those costs, only a low percentage of those eligible are actually enrolled.

A package of draft recommendations debated by the Medicare Payment Advisory Commission (MedPAC) also seeks to heighten awareness of Medicare's prescription drug benefit for low-income elderly or disabled Americans. Almost half of Medicare beneficiaries eligible are unaware of the benefit, which in many cases covers almost all of their prescription drug costs.

MedPAC staffer Joan Sokolovsky and Hannah Neprash laid out some of the problems low-income seniors face in a presentation to the commission Thursday. Medicare beneficiaries as a whole typically have higher out-of-pocket health costs than the rest of the population, but incomes are lower, they noted. While the median income of American adults under age 65 was $28,077 in 2006, it was $17,045 for those 65 or older. And almost two-thirds of those 65 or older had incomes below $19,000 a year, they said, citing U.S. Census data.

"High out-of-pocket health care costs may motivate Medicare beneficiaries, especially those near the poverty line, to avoid necessary health care," the staffers said. "Overall self-reported rates of avoidance among low-income seniors were 30.9 percent for physician visits, 20.7 percent for hospital visits, and 26 percent for prescription filling," they added.

Medicare Savings Programs lower those out of pocket costs. "MSPs" consist of three different types of programs. The Qualified Medicare Beneficiary (QMB) program is for those with incomes below the federal poverty line and covers Medicare Part A premiums and Part B premiums and other cost-sharing expenses such as deductibles, copayments, and coinsurance. The Specified Low-Income Medicare Beneficiary (SLMB) is for those with incomes between 100 and 120 percent of the poverty line and pays for Part B premiums only. The Qualifying Individual (QI) program is for those with incomes between 120 and 135 percent of the poverty line and also pays Part B premiums.

"MSP enrollment reduces health care avoidance," according to the staffers. For example, "QMB enrollees were half as likely as non-enrollees to report physician avoidance," they said.

But lack of awareness of the programs, complexity of the applications and enrollment processes, and the reluctance to go to state Medicaid offices to sign up because of perceived welfare stigma all hinder participation, according to the analysts. Only about one-third of those eligible for the QMB program are actually enrolled, and the figure is lower for the SLMB program, Sokolovsky said. A number of factors complicate outreach; for example, many of those eligible but unenrolled live in rural areas, have cognitive difficulties, or are homebound.

However, foundation grants funding targeted outreach programs have paid dividends. "Successful efforts targeted individuals and provided specific information on how and where to get help with enrollment," the staffers said. Minnesota's State Health Insurance Assistance Program (SHIP) used grant money to sharply boost MSP enrollment on Indian reservations, Sokolovsky said.

However, these "SHIP" programs get limited federal money. Under one of the draft recommendations, the Secretary of Health and Human Services would be required to increase SHIP funding, which also aids efforts to find and enroll those eligible for Medicare's low-income drug benefit. "The SHIPs should use the additional money to support work to increase participation in programs targeted to low-income beneficiaries," the draft language says. Added money could be used to train local volunteers to provide counseling on program eligibility, buy laptops to submit applications from homes, churches, and other community sites, provide more rural outreach, and provide written materials and translators for non-English speakers, the staffers said.

MedPAC will vote on the recommendation at its meeting in December.

It also will consider a recommendation to simplify the application process for MSPs by making income eligibility and asset requirements consistent with that for the low-income drug benefit. The latter benefit allows those with slightly higher incomes and larger amounts of assets to qualify. A third recommendation to be considered next month states that Congress "should change program requirements so that the Social Security Administration screens Low Income Subsidy applicants for federal MSP eligibility and enrollees them if they qualify." LIS refers to the subsidy for the low-income prescription drug benefit.

Commissioners voiced support for all three recommendations but noted that having Social Security offices enroll LIS applicants in the MSPs if they qualify would in effect lead to greater state spending because MSPs are funded by state Medicaid programs. Commissioner Nicholas Wolter questioned whether it was appropriate for the Medicare commission to make recommendations affecting state Medicaid spending. He expressed hope that the panel would find a way to move forward on the recommendations, however, saying they were "spot on" in terms of what is good policy for low-income beneficiaries.

By John Reichard, CQ HealthBeat Editor

November 9, 2007 -- Worries are growing at the Medicare Payment Advisory Commission over the direction of the Medicare Advantage program—the private health plan side of Medicare—and whether the nation is getting the value it should for the dollars it's spending.

"I fear we are going backwards," MedPAC Chairman Glenn Hackbarth said Friday at a commission meeting. Hackbarth was reacting to data showing spottier quality in newer plans, as well as the growing prominence of "private fee-for-service plans" in Medicare Advantage—known as "MA"—that don't really manage care.

"Evaluating various data sources, what we have found is the most recent data on quality in MA plans show a need for improvement," MedPAC staffer Carlos Zarabozo told commissioners. "They also show that there is substantial variability across plans in their performance, and performance in newer plans is generally poorer" than performance in older plans, he added.

Mohit Ghose, a spokesman for the managed care industry, said analysts should not draw the wrong conclusions from the data, noting that systems to manage and evaluate quality of care are largely missing in traditional Medicare. That means quality of care is largely unknown in the traditional program, and that, by contrast, even MA plans with spottier performance have benchmarks against which to make improvements, noted Ghose, a spokesman for America's Health Insurance Plans (AHIP).

His comments suggest that quality of care in traditional Medicare may be considerably worse.

Zarabozo focused on results from a Medicare survey designed to assess changes in "health outcomes" in MA plans, as well as recent findings from the National Committee on Quality Assurance (NCQA) on the performance of MA plans on specific measures of quality.

The "outcomes" survey questions beneficiaries in MA plans at the beginning of a two-year period and again at the end to get their individual assessments about whether their health had grown better or worse than they expected over the two years. Beneficiaries were asked about both their physical and mental health. The survey has examined two-year periods going back to 1998.

In the most recent assessment—from 2004 to 2006—beneficiaries in only five of the 151 plans surveyed rated their mental health as better than expected. In the 2003–2005 and the 2002–2004 periods, beneficiaries in considerably more plans reported better-than-expected mental health—18 plans and 27 plans, respectively. Beneficiaries in 13 of the plans reported that their physical health was worse than expected in the 2004–2006 study, compared with beneficiaries in zero plans in the 2003–2005 and 2002–2004 studies. Thirteen was the largest number of plans in the history of the two-year surveys in which beneficiaries rated their physical health as worse than expected.

Reviewing NCQA findings released in September on 2006 quality performance, Zarabozo said commercial and Medicaid managed care plans showed greater improvement on a larger number of quality performance measures than did Medicare Advantage plans. MA plans improved on 7 of 38 measures from 2005 to 2006, while commercial plans improved on 30 of 44 and Medicaid plans on 34 out of 43, according to Zarabozo. "For the 30 measures common to MA and commercial plans, commercial plans had better scores than Medicare on 16 measures," he said.

His presentation also looked specifically at one measure, whether diabetics receive routine eye exams to assess whether their vision is declining. Twenty-four percent of Medicare Advantage plans provided those exams for fewer than 50 percent of their diabetic enrollees, and about half provided them for fewer than 60 percent of their diabetic enrollees, according to the 2006 data. Older plans were far more likely to provide the exams than newer plans, a trend noted on almost all measures of quality performance, the MedPAC staffer noted. "New plans are smaller and are more likely to be PPOs, but these factors do not explain lower scores," he noted.

Zarabozo defined 119 MA plans in the analysis as "new," meaning they signed contracts with the Medicare Advantage program on or after June 1, 2004. The plans included HMOs and PPOs but not private fee-for-service plans, which are exempt from requirements to report data on the quality of care. The new plans account for about 15 percent of Medicare Advantage enrollment.

MedPAC Commissioner Jack C. Ebeler called the data "disappointing." Ebeler, the former head of the Alliance of Community Health Plans, an association representing older, more tightly managed HMOs, said "this is not what we are hoping for."

For his part, Hackbarth queried Zarabozo on where Medicare stood in providing data comparing quality in Medicare Advantage to that in traditional Medicare. The staffer said Medicare will be making data available comparing how often MA enrollees and enrollees in traditional Medicare get flu shots, and how they rate overall satisfaction with the care they are receiving.

But Hackbarth weighed in more strongly a few minutes later. "I'm struggling to get to 'disappointed,'" he said dryly, referring to Ebeler's reaction to the data on quality. "I'm more depressed."

Hackbarth's comment seemed as much, if not more, directed at the surging enrollment in private fee-for-service plans, which are paid much more than other MA plans but which do not have networks of providers that attempt to organize care more efficiently and are not measured on the care they do provide. Private fee-for-service plans, in addition to "Special Needs Plans," were added to the private health plan side of Medicare under the 2003 Medicare overhaul law (PL 108-173), and account for much of the surge in overall MA enrollment since then.

"A number of things are depressing about these results," Hackbarth said. "I think that one of them is that I fear that we are going backwards, that the policy changes that we made in this program are converting Medicare Advantage from a program that's leading edge where we reward organized systems that reduce costs and improve quality ... that we're going to private fee-for-service, that has little potential to do either. These results are just a reflection that we're not evolving, we're devolving."

Commissioner Nancy M. Kane noted that Harvard Pilgrim Health Care, a Massachusetts health plan with a reputation for tightly managing care, has switched its Medicare enrollees into a private fee-for-service plan. That not only means it gets paid more, it also isn't held to the higher quality standards that other Medicare Advantage plans must meet. Many more private fee-for-service plans have applied to enter the Medicare Advantage program next year, and could be highly attractive to Medicare beneficiaries. That's because as in traditional Medicare, they have the ability to choose which doctor or hospital they use—but they also may pay lower copayments and get better benefits.

Commissioners said MedPAC should state more forcefully its position that Medicare Advantage plans should be accountable for the care they provide and that they should be paid based on the quality of their performance. "We want not only reporting, but also performance," said commissioner Nicholas Wolter. "I think we should be very strong on this" in recommendations to Congress and the Medicare program.

The Friday meeting also examined special needs plans, or "SNPs," whose enrollment also is growing fast, whose payments are higher than those received by many MA plans and whose number is rapidly growing. In theory, the plans could significantly improve quality and lower costs by managing much more carefully the treatment received by the most chronically ill Medicare beneficiaries. But SNPs are not subject to requirements to ensure that they offer that type of specialized care, said MedPAC staffer Jennifer Podulka.

Podulka unveiled a package of eight draft recommendations to establish performance measures for the plans and to evaluate their performance within the next three years, among other provisions. MedPAC is scheduled to vote on the recommendations at its meeting in December, in a bid to influence Medicare legislation pending in Congress.

AHIP's Ghose emphasized that the data on quality performance presented at Friday's meeting must be placed in the proper context. It takes time to bring enrollees into managed systems and to improve the quality of their care, he said. As a result, it's hardly surprising that older MA plans would outperform newer ones, he added. But unlike providers in traditional Medicare, managed care plans in the Medicare Advantage program are organized to measure, manage, and improve care, he said. Improvements by Medicare Advantage plans on NCQA quality measures may have slowed because of the influx of new enrollees, according to Ghose, but because of a lack of data on quality of care in traditional Medicare, "we don't know whether people are doing better at all."

By John Reichard, CQ HealthBeat Editor

November 7, 2007 -- If laying out options and vigorous discussion are the marks of progress, then Senate Finance Committee members made strides at a meeting Wednesday toward assembling a package of Medicare revisions to block a scheduled 10.1 percent cut in payments to physicians Jan. 1. But if the benchmark is the number of decisions on cuts elsewhere in Medicare to pay for the "doctor fix," then the panel has a long way to go.

With the end-of-the-year work piling up for his committee on tax, Medicare, and other issues, Chairman Max Baucus, D-Mont., doesn't want the distraction of dealing with press reports and resulting pressure from lobbyists about the details of possible payment cuts. The panel's top Republican, Sen. Charles E. Grassley of Iowa, announced to reporters after the meeting that he intends to play ball with Baucus. "In these rump sessions, he's asking us not to tell what goes on in there," Grassley said. "Those are the rules of the game and I'm going to play by the rules."

But other Republicans expressed frustration with the process while offering few, if any, details of the type and size of cuts under discussion. Utah Republican Sen. Orrin G. Hatch voiced worry that, with few decisions made so far, cuts would be determined at the last minute with little public scrutiny. "I think they're a long way from consensus on a lot of things," Hatch said after leaving the meeting. "There's a worry that they might just put together a package without really considering it in public, and I think we need to do that, this is an important bill," he said. "A lot of people could be very disastrously affected if it's not done right. We ought to have a markup and we ought to battle these things out in public."

Baucus has been pushing for a two-year fix that, according to earlier estimates, would help drive up the cost of the total package to as much as $30 billion over five years. In addition to blocking payment cuts to doctors, the package among other provisions is also expected to boost rural provider payments and block cuts in rehab therapy. Meanwhile, Republicans led by Grassley have called for a one-year fix to ease pressure for a large package of cuts including those in payments to private health plans in the Medicare Advantage program.

"I really have questions about why they are so fixated on the so-called doctor's fix," said Mississippi Republican Trent Lott, apparently referring to pressure for a two-year fix. "I'm very much concerned about offsets that would impact Medicare Advantage, which would impact rural states." Lott also expressed frustration with making cuts in a large number of areas. With a one-year fix, "you don't have to deal with as many ... we're talking about oxygen for old people, for heaven's sake, which is a concern."

Lott said "they had a list of 10 or 12 areas that could be impacted" by payment cuts used as offsets. "This list of other offsets quite often are going to wind up costing more than they're worth, whether it's imaging ...." Lott said, but did not finish the thought. Asked whether home health cuts were on the list, he said "I think they finally decided that they're going to be pretty limited in what they do in that area."

While committee members said little publicly about Medicare Advantage cuts after the meeting, a significant amount of discussion behind closed doors centered on payments to private fee-for-service plans, sources said. A number of analysts have questioned the value those plans deliver to Medicare because they receive large payments and do little to manage care, but private fee-for-service plans are growing rapidly in rural areas, which typically have strong influence over legislation produced by the Finance Committee.

The committee's timetable on the Medicare package is unclear. "We just had a good discussion," said Arkansas Democrat Blanche Lincoln. "I think we're just going to continue to visit and talk and get a better understanding of what's in the details," she said. Asked whether the committee will mark up legislation, Lincoln said "I think we'll come up with a product." Pressed on a possible markup, she said "I don't think we've gotten to that point yet."

By John Reichard, CQ HealthBeat Editor

Medicare's prescription drug benefit for low-income seniors and disabled Americans is a very good deal, but too few of those eligible are enrolled, and those who are face chaotic year-to-year changes that can affect access to their medications, speakers at a Capitol Hill forum said Monday.

Forty-eight percent of seniors with incomes at or below 150 percent of the federal poverty line are unaware they qualify for the low-income benefit, said Stuart Guterman, director of the Program on Medicare's Future at The Commonwealth Fund, a foundation that funds studies of health coverage issues. Those unaware of the benefit—which is funded by a relatively generous "low-income subsidy" (LIS) —are disproportionately African American, non-white Hispanic, or at the very lowest end of the income scale, Guterman said. The forum was sponsored by the Alliance for Health Reform, a nonpartisan group that sponsors educational programs on health policy issues.

The 150 percent figure is the cutoff point for the benefit, which covers the vast majority of prescription drug costs of those who qualify. The benefit is part of Part D of the Medicare program, the prescription drug benefit established under the 2003 Medicare overhaul law (PL 108-173). Part D coverage is available to all Medicare beneficiaries, either through stand-alone "PDPs," or Prescription Drug Plans, or through private health plans in Medicare, known as Medicare Advantage plans.

Those who do enroll in the low-income benefit get much better protection against out-of-pocket prescription drug costs than beneficiaries with standard Part D coverage, Guterman noted, citing data from a survey by the Kaiser Family Foundation, The Commonwealth Fund, and the Tufts–New England Medical Center. The survey of some 16,000 Medicare beneficiaries found that only 11 percent of beneficiaries with the low-income benefit spent more than $100 on prescription drugs in the prior 30 days, compared to 32 percent of those with low-incomes not enrolled in the low-income benefit.

John Rother, policy director at the senior lobby AARP, noted that the low-income benefit on average delivers $3,353 worth of prescription drug coverage to those receiving it—"so you wonder why people aren't beating down the doors to be enrolled." The Centers for Medicare and Medicaid Services estimated soon after the creation of Part D that 14.4 million Medicare beneficiaries would enroll in the benefit, yet thus far, only 9 million are actually signed up, he said. Another 2.3 million beneficiaries who would qualify based on income are excluded because they too meet the assets test, he noted.

Besides ignorance of the benefit, Rother said people fail to enroll because it has a "welfare stigma" for some people, associated with where they must go to enroll and the asset test, which requires them to list such holdings as burial plots and life insurance policies under penalty of criminal prosecution if they fail to state the value of assets accurately.

Another problem with the low-income benefit occurs with automatic enrollment provisions used to sign up some beneficiaries. Laura Summer, a researcher at Georgetown University's Health Policy Institute, said medications needed by an individual beneficiary may not be on the formulary of covered drugs of the plan in which the beneficiary is automatically enrolled. Enrollees' health may suffer because they may go without needed medications for a time because of difficulties they experience with appeals and other procedures to obtain needed drugs, she said. Summer said that about two million beneficiaries with the low-income benefit will automatically be switched to another plan at the start of next year because the plan they are in this year will charge premiums too high to participate in the low-income benefit.

Rother predicted that many of these beneficiaries will continue "ping ponging" from one plan to another with each new year—with the attendant prescription drug access problems that creates. Why? The relatively high prescription drug costs of these enrollees will drive up premiums beyond a Medicare premium "benchmark" that determines whether or not a plan charges the beneficiary a premium and therefore whether or not it can be offered to those in the low-income benefit. Fueling those higher costs is the greater reliance of those plans on brand name rather on lower-cost generic drugs, Rother said. He urged changing the way benchmark is calculated to allow low-income beneficiaries in the same plan from year to year, and that the asset test be eased or eliminated. Asset test changes may be included in Medicare legislation to be considered later this year by Congress, he said.

Tracey McCutcheon, deputy director of the CMS Medicare Drug Benefit Group, did not comment on Rother's call for changes in the asset test, which could draw significant GOP opposition. But McCutcheon said there will be a slight increase next year in the number of drugs covered on the formularies of prescription drug plans. She added that CMS is doing "lots of work" to increase its efforts to enroll beneficiaries in the low-income benefit, including giving estimates by zip code of the number of potential qualifying applicants to groups assisting in enrollment efforts.

By Sasha Bartolf, CQ Staff

November 6, 2007 -- A new poll released Tuesday by the American Hospital Association revealed that in the four major primary state battlegrounds, both Republican and Democratic primary voters believe their parties' presidential candidate should focus on health care costs and coverage over issues such the Iraq War, illegal immigration, and the economy.

The poll interviewed 600 likely 2008 general election voters, and 400 primary caucus voters from both parties living in Iowa, New Hampshire, South Carolina, and Nevada.

When asked about which issue or issues caucus members would most like to hear presidential candidates discuss, 26 percent of Republican caucus voters and 55 percent of Democratic caucus voters listed health care as the top issue. Iraq ranked second in importance for GOP primary and caucus voters at 19 percent, and at 44 percent for Democratic voters.

Forty percent of general election voters in the four states surveyed also chose health care as the most important issue for presidential candidates to discuss. Thirty-two percent of all voters chose Iraq as the second issue they wanted addressed.

"The top priority for voters this election campaign is the future of health care in America," said AHA Executive Vice President Rick Pollack.

When asked why health care was so important, 54 percent of general election voters said it was because the health care system in their state was not meeting their needs; however, different states offered varying levels of dissatisfaction. General election voters in Iowa said 49 percent of their needs were not being met, while 61 percent of Nevada voters expressed their frustration with the state's health care system.

Eighty seven percent of general election voters favored providing health care coverage for everyone, with government, individuals, and employers contributing to the cost. When asked how this can be achieved, Republicans responded that requiring insurers to offer insurance to those with preexisting conditions would be their first choice for ensuring coverage for more Americans, followed by an employer mandate and an individual mandate. In contrast, Democrats stated that creating a single-payer system was the best way to ensuring health care access to everyone, followed by an individual mandate and an expansion of government programs for children.

When asked what goal the next president should address first, the consensus among general election voters in all four states was that making health care more efficient and affordable should come before figuring out how to cover everyone. However, differences between each party arose when the same question was posed to caucus and primary voters. Forty four percent of Republican caucus voters prioritized cost of coverage while only 17 percent of Democratic primary voters did; in contrast, 45 percent of Democratic caucus voters preferred that the next president focus on guaranteeing coverage to everyone, while only 15 percent of Republicans participating in the caucus favored this as their first health care measure.

When primary voters were asked what would be the best way to make health care more efficient and affordable, Democrats believed lowering administrative costs would lead to a better health care system. Republicans, on the other hand, thought that reforming the medical lawsuit system would lead to greater efficiency and lower costs.

All general election voters and caucus voters agreed that the most effective way to increase patient safety, lower costs and reduce paperwork would be to give patients the option of having electronic medical records. When asked what step should be taken first to improve the quality of health care, the majority of respondents agreed that providing doctors with the most current medical information was essential to improving care.

When questioned whether the next president and Congress should increase federal funding for hospitals, 55 percent of general and primary election voters agreed that funding should expand, while 7 percent believed hospital funding should decrease.

The survey also analyzed how voters in each state felt about the health care they were currently getting. For Nevadans, 28 percent experienced a time in the last three years when they did not have health insurance, which is the highest number of any of the states surveyed. In New Hampshire, Republican caucus voters are more interested in hearing how the candidates will cover the uninsured than in the other primary states.

National polling firms Public Opinion Strategies and Greenberg, Quinlan, Rosner conducted the survey on behalf of the American Hospital Association.

By Miriam Straus, CQ Staff

November 5, 2007 -- By a nearly two-to-one ratio, American voters believe that the federal government should provide health insurance for those who cannot afford it, according to a recent Quinnipiac University national poll.

The survey, released Nov. 1, also found that 57 percent of those polled think it is the federal government's responsibility to ensure everyone in the United States has health care.

"On a broad level, people tend to believe that the government should guarantee insurance," said Robert Blendon of the Harvard School of Public Health. However, "there is not a consensus on how to do that. On a day to day basis, middle-income Americans are not that critical of their own health care coverage. Changing the health care system can be very threatening to them, even though they do want to help [those who are currently uninsured]," he said.

Republicans were more satisfied with health care in this country today than Democrats. Seventy-five percent of Republicans rated the quality of U.S. health care as "excellent" or "good," compared with 40 percent of Democrats. Overall, satisfaction was notably higher on a personal level: 85 percent of those polled rated the health care that they and their family receive as excellent or good.

Women are more likely than men to say that it is the government's responsibility to ensure that everyone in the country has adequate health care coverage (64 percent to 49 percent). Women also are more critical of care in the country as a whole. Forty-eight percent of female voters rated U.S. health care as "not so good" or "poor," compared to 34 percent of male voters.

Among presidential candidates, Sen. Hillary Rodham Clinton, D-N.Y., is overwhelmingly viewed as the most concerned with health care. When asked which candidate places the greatest emphasis on this issue, 53 percent of voters say Clinton, 6 percent say former Sen. John Edwards, D-N.C., 4 percent of respondents said that Sen. Barack Obama, D-Ill., placed the most emphasis on health care issues, and 2 percent of voters say former New York City Mayor Rudolph Giuliani a candidate for the Republican presidential nomination.

"People make judgments [based] on history and experience," Blendon said. Clinton has often been questioned about her failure in 1994 to establish universal health coverage, and Blendon thinks Americans believe that Clinton has learned from that battle. She "has been running on a case that it's a hard problem to solve, but that she is committed to getting something done," he said.

The poll also showed strong support from both Republicans and Democrats (70 percent overall) for the federal government to help pay for high-cost health cases. "That might be a starting point for consensus," said Director of Quinnipiac University's Polling Institute Maurice Carroll. "Democrats favor it, of course, but most Republicans do, too."

Blendon urges caution in interpreting these results, however. When polls give people just a few options, such as expanding Medicare coverage to everyone or reauthorizing the State Children's Health Insurance Program, he says, approval ratings are often around 70 percent. "People really want something done, but they don't have a clear policy focus," he said.