Private fee-for-service plans slammed at Senate hearing

[Omaha Steve]

http://www.statesman.com/blogs/content/shared-blogs/washington/medicare_monitor/entries/2008/01/30/private_feeforservice_plans_sl.html

By Larry Lipman | Wednesday, January 30, 2008, 04:55 PM

Private fee-for-service Medicare plans, the fastest-growing form of Medicare, are both excessively costly and medically inefficient, a Senate panel was told Wednesday.

The plans cost 17 percent more than traditional Medicare and do not meet the same quality care standards imposed on other private plans such as health maintenance organizations (HMOs), the Senate Finance Committee was told.

In the past two years, enrollment in private fee-for-service plans has grown from 200,000 to 1.7 million beneficiaries. The plans are popular because in return for a beneficiary’s Medicare premium, the plans allow members to receive care from any doctor, cover many of the expenses generally covered by private Medigap plans, and offer additional benefits such as vision, hearing and dental care.

But the plans have been plagued by questionable marketing techniques, low payment rates to health-care providers, and confusion among beneficiaries, the committee was told.

“These products give the private sector a bad name,” said Sen. Ron Wyden, D-Ore., who compared private fee-for-service plans to “Dodge City before the marshal arrives.”

Mark E. Miller, executive director of the nonpartisan Medicare Payment Advisory Commission — created by Congress to recommend changes in Medicare payments — told the committee that the high payment rates for private fee-for-service plans come “at an unacceptably high cost to Medicare.”

FULL story at link.