"Medicare Advantage: Wrong Way to Spend $54 Billion"--The AMA Goes After the Medicare HMO's Money

The American Medical Association (AMA) in an editorial in its journal, American Medical News, has pulled no punches in its argument that Medicare HMO plans (Medicare Advantage) need to be cut in order to find the money to fix the upcoming Medicare physician fee cuts--10% in 2008 and another 5% in 2009.

Without a doubt their attack on "excess payments" to insurers is self serving--as about all lobbying is. But it also gives us a look into the pitched battle that is now going on in Congress over who is going to win and who is going to lose when it comes to Medicare provider payments.

Here is an excerpt from their November editorial:

"Meanwhile, many more seniors could well be affected by physician pay that faces a staggering cut, currently estimated at about 10% for 2008, and 15% through 2009. It's no surprise that an AMA online survey of nearly 9,000 physicians, released in June, reports that about 60% of doctors say the cut will force them into the position, at the least, of having to limit the number of new Medicare patients they take.

"It is time for Congress to look at Medicare Advantage with clear eyes. Congress needs to level the playing field between traditional Medicare and private Medicare plans by eliminating excess payments to Medicare Advantage. The $54 billion saved would be more than enough to offset eliminating the two-year cut in physician reimbursement, as well as an update in payments to reflect increasing physician costs -- all while limiting premium increases for seniors.

"Medicare Advantage, which covers managed care and private fee-for-service plans, was created to make Medicare more competitive and efficient, as well as to entice private plans to rural areas or to offer extra benefits. Instead, the program appears to have become more of a Medicare benefit for insurers, which on average received 112% of the amount that traditional Medicare paid for each senior's care in 2006. For private fee-for-service plans alone, that figure was 119%.

"Yet despite Medicare Advantage's good fortune, it has managed to disappoint many patients and physicians. More than 50% of 2,022 physicians responding to an AMA survey on Medicare Advantage, released in May, said they have seen plans deny services typically covered in the traditional Medicare plan. More than half of physicians report receiving payments below the traditional Medicare rate."

Read the full editorial here.