7/11/2008 © Florida Health News
WASHINGTON, D. C. – The Medicare reform bill that would reverse doctors’ pay cut would also crack down on a type of health plan that has drawn thousands of complaints. The private fee-for-service plan, the highest-paid and fastest-growing product in the Medicare Advantage program, would have to sign up doctors and hospitals for their members to use. Under current law, there is no such requirement -- as Paul and Fran Kujda of Orlando learned the hard way.
The private fee-for-service plan, the highest-paid and fastest-growing product in the Medicare Advantage program, would have until 2011 to develop networks of doctors and hospitals for their members to use. Under current law, there is no such requirement.
The result? Many members of such plans can’t find a doctor or hospital in a reasonable distance that will accept them as patients. A case in point: Paul and Fran Kujda of Orlando.
Retirees from Michigan, their employer switched their coverage this year to a private fee-for-service plan administered by Blue Cross Blue Shield of Michigan. In January, Fran Kujda found out the new policy spelled trouble when she went for her annual mammogram at Orlando Regional Medical Center, where she’d being going for 10 years. She was turned away. The only place she could find that would accept her plan was an hour’s drive, and her doctor didn’t practice there.
Paul Kujda realized he’d better contact Florida Hospital, where his cardiologist practices and where he had undergone two surgeries for heart problems. He found out that Florida Hospital group – one of the largest in the nation, affiliated with Adventist Health System – accepted no private fee-for-service plans except in emergencies.
“For six months, I had no insurance in Orlando,” he said. Last month, Florida Hospital agreed to accept his insurance. “They can choose to take you one day and not take you the next,” he said.
Michigan retirees in Sarasota were in a similar predicament until Sarasota Memorial Hospital changed its policy and accepted the plan, the Sarasota Herald-Tribune reported in February.
The Kujdas and other Michigan retirees could choose a different Medicare plan, but they would no longer be covered by the state. “It would be at their own cost,” said Jan Winters, deputy director of the Michigan Civil Service Commission.
Unlike most companies that receive payment from the government to cover the health needs of Medicare beneficiaries, private fee-for-service plans tell enrollees that they can go to any doctor or hospital. One St. Petersburg-based plan is even named “Any, Any, Any” because the company that sponsors it promises to cover treatment by any doctor, any time, anywhere. This approach appeals to beneficiaries who come to Florida in winter, who travel a lot or who just want to make sure they have free choice.
But the lack of a contract between the health-care providers and the insurer means there is no network, no list of participating physicians. Doctors can accept or decline patients on an “appointment by appointment basis,” said Mark Owen, a vice president at Blue Cross Blue Shield of Michigan.
Although enrollment in PFFS plans is only 1.7 million of the 44 million older and disabled Americans with Medicare, that represents an 8-fold rise over just two years, according to the Medicare Payment Advisory Commission. In Florida, 62,000, or 2 percent, of the Medicare population are enrolled in private fee-for-service plans.
West Virginia and Pennsylvania are among the states that have also transferred their government retirees to PFFS plans, members of the Senate Committee on Finance learned during a hearing earlier this year. A representative of a union for Pennsylvania retirees told the committee that they had problems finding treatment providers who would accept the coverage.
Requiring PFFS plans to form provider networks with hospitals and doctors would make it easier for members to find medical care. But critics say it could backfire and hurt beneficiaries.
Establishing a provider network takes time and money, said Dr. Akshay Desai, president and CEO of Universal Health Care Insurance Co., the parent company for Any, Any, Any. Some doctors and hospitals will try to hold out for higher payments or just refuse to sign on, he said.
“Right now PFFS members enjoy access to any willing provider throughout the nation,” he said. “They are not restricted by a network; that level of choice, flexibility, and freedom would not be there.”
Kujda’s plan made the same pitch. “You may continue to use any Medicare health care provider that accepts the plan’s terms and conditions of payment,” says a letter from Medicare PLUS Blue Group.
“These terms are very generic and can change any time,” said Joe Brown, a spokesman for Orlando Health, which owns Orlando Regional and seven other facilities in central Florida. The 1,780-bed system does not accept any PFFS Medicare patient. Although Jan Winters, deputy director at Michigan’s Civil Service Commission said its plan pays providers the same as traditional Medicare, Brown said the plan can change rates unilaterally since there is no contract.
Although the PFFS companies pay providers the same rates as traditional Medicare, they receive payment from the government that is 17 percent higher than traditional Medicare costs.
“PFFS plans not only get the most overpayment, they spend less of it on extra benefits,” said Edwin Park, a Senior Fellow at the Center on Budget and Policy Priorities. It’s no coincidence that PFFS plans are the fastest-growing type of Medicare Advantage product or that they are among the worst offenders when it comes to tricking seniors into enrolling, he said.
Last year, seven insurance companies including Tampa-based Wellcare Health Plans Inc. voluntarily stopped selling their PFFS plans until Medicare officials could determine that their sales practices did not mislead consumers and doctors. The companies that agreed to suspend marketing comprised 90 percent of the PFFS enrollment in the country. Some of the fraudulent tactics sales agents used included impersonating federal officials, tricking people into signing up and enrolling beneficiaries with dementia who could not understand the plans, The Tampa Tribune reported.
The Medicare legislation also cracks down on unscrupulous sales tactics by companies selling Medicare Advantage plans. They would be required to tell seniors what kind of plan is being offered – PFFS, health maintenance organization or preferred provider organization. They couldn’t use “bait and switch” tactics to lure seniors into joining, offer free meals or meet with seniors without a prior appointment. Sales agents and brokers would have to be trained and they would have to be licensed in the states where they operate.
If requiring PFFS plans to have provider networks causes enrollment to drop, as Universal Health Care’s president predicts, some say that’s a good thing.
In fact, Congress is banking on it. The Congressional Budget Office estimates the provider network requirement would slow the growth of PFFS plans. Since they receive the highest Medicare reimbursement, a decline in enrollment will generate bigger savings – about $12.5 billion over five years. That money would be used to expand Medicare benefits and avoid cutting doctors’ payments.
--Contact Florida Health News Washington correspondent Susan Jaffe at Susan.Jaffe@FloridaHealthNews.org