- Important: All passwords were reset on 06/15/11. Old passwords will no longer work. Click here to retrieve your password.
- Subscribe to Our Free Dewsletter
We are non-commercial, all volunteer and supported by our readers. Please help sustain the Dew by making a donation.
Doing the Math
New Study Shows Why Republicans Are Wrong About Privatizing Medicare
- This article was published by the Center for American Progress.
Republicans routinely claim that shrinking the government’s involvement in health care would eliminate waste, inefficiency and significantly lower health care costs. But during the debate over the Affordable Care Act, these same politicians lambasted Democrats for cutting $500 billion from Medicare and Medicaid, and specifically argued that the government’s overpayments to private health insurance plans participating in Medicare Advantage (MA) were essential for preserving seniors’ access to services — particularly in rural areas. “The fact of the matter is, the bottom line, is that these are 10 million people that are going to lose benefits. And that’s what it boils down to,” Sen. Orrin Hatch (R-UT) warned during the mark-up process in the Senate Finance Committee.
Since President Obama signed reform into law, however, the GOP’s doomsday predictions have gone unrealized, and today a new report from the Government Accountability Office (GAO) shows that some private plans are still abusing the system and reporting higher patient severity than is actually supported by medical records. As a result, the government is paying private insurers substantially more than it spends on traditional fee-for-service Medicare:
GAO found that diagnostic coding differences exist between MA plans and Medicare FFS. Using data on beneficiary characteristics and regression analysis, GAO estimated that before CMS’s adjustment, 2010 MA beneficiary risk scores were at least 4.8 percent, and perhaps as much as 7.1 percent, higher than they likely would have been if the same beneficiaries had been continuously enrolled in FFS. The higher risk scores were equivalent to $3.9 billion to $5.8 billion in payments to MA plans. Both GAO and CMS found that the impact of coding differences increased over time. This trend suggests that the cumulative impact of coding differences in 2011 and 2012 could be larger than in 2010.
In contrast to GAO, CMS estimated that 3.4 percent of 2010 MA beneficiary risk scores were attributable to coding differences between MA plans and Medicare FFS. CMS’s adjustment for this difference avoided $2.7 billion in excess payments to MA plans. CMS’s 2010 estimate differs from GAO’s in that CMS’s methodology did not include more current data, did not incorporate the trend of the impact of coding differences over time, and did not account for beneficiary characteristics other than age and mortality, such as sex, health status, Medicaid enrollment status, beneficiary residential location, and whether the original reason for Medicare entitlement was disability. [...]
GAO’s findings underscore the importance of both CMS continuing to adjust risk scores to account for coding differences and ensuring that those adjustments are as complete and accurate as possible.
In other words, Republicans were wrong in trying to preserve the government’s subsidies for private insurers during the health care battle and they’d be foolish to stand in the way of more reforms now. Medicare Advantage can only be a viable option for seniors if it can help control health care spending. Eliminating waste, fraud and abuse from the program is crucial to improving Medicare’s sustainability and bending the cost curve.
Worthy of Comment
Also on the Dew
In business school there is little ambiguity as to the mission, money ... profits. In art school it's a little different. The one I went to required focus, after a year of fundamentals, on one of several options: Advertising, Illustration, Industrial Design (all, you'll note, with the same point as business school) or Fine Art. Within the Fine Arts, by year three, one selected a major: painting, sculpture or printmaking. Of course everyone knew that “fine art” was a commodity, but it was considered crass to dwell too much on that area. So what, if not money, was the point? Wel Read on →
When they were small my husband used to say, “With a mother like you, Columbus would never have discovered America.” I knew I was over-anxious and didn’t want to burden them; I could barely contain my anxiety when small boys walked along a pier by the sea peering down at the fish (I couldn’t swim) or stood on a cliff’s edge (I suffer from vertigo) but I could keep quiet about my night vigils when they were growing up. In their late teens and early twenties (it’s legal from age 18 to drink in British pubs) they sometimes came in drunk and I relie Read on →
Oh, I love it and I hate it, Every now and then berate it, The sweet and sunny south where I was born. — Gina Forsyth Image in my head: a tour bus arriving in the republic of Biblestan, disgorging a file of daytrippers, like poverty tourists in a Rio slum, at some ramshackle barbecue joint, hiply-shod, fanny-pack-wearing gawkers shocked at the absence of recycling bins by the dumpsters, saying “Gee whilikers!” and “You betcha!”, having their barbecue not too spicy! then waddling off to the Gift Shop for some outrageous corncob art. I have Chuck Thompson’s book Better Off Without ‘Em: A Northern Manifesto for Southern Read on →
Instead of naming their new subdivisions the Dune Cottages, the Ocean Forest Cottages and the Riverside Cottages and then running their Dune Avenue down the Sea Island Spit, where the Loggerhead Turtles nest and 144 species of birds come to rest, making reference to the sea of effluent on which their cottages sit would be more honest, but it wouldn't attract many new buyers for Sea Island Coastal Properties' million dollar lots, would it? And it probably wouldn't please the realtors trying to move the 29 extant mansions in the million dollar plus range (For anyone looking to pay less for Read on →