Competitive bidding system could mean the end of MA

Among the many issues facing Congress in its efforts to reform the American healthcare system is the future of Medicare Advantage.

There have been suggestions that MA be replaced with a competitive bidding system.

“This could mean the awarding of a limited number of contracts to private plans in a DoD-style procurement process,” said Robert E. Moffit, director of the Center for Health Policy Studies at the Heritage Foundation. “Or it could mean that Medicare payments would be based on competitive bids on a regional basis or national basis with all comers being able to play in the competition.”

Congress has given no details about MA changes, and there is no consensus on Capitol Hill about what should be done with MA and private plans, but the Obama administration seems to think MA is overpaid.
MA has had a rocky history, said Moffit. Many seniors rely on supplemental insurance for additional coverage to help fill in the gaps, and MA is an alternative to the existing system of supplemental coverage.

“It’s not a surprise that it has had rapid growth – about 20 percent of all seniors are enrolled in MA,” he said.
According to a study by America’s Health Insurance Plans, based on the 2006 Medicare Beneficiary Survey, MA enrollees have less problems with access to care compared to those in traditional Medicare who don’t have any supplemental coverage.

Wellness options and benefits are also more commonly used in an MA plan.

Jeff Lemieux, senior vice president at the Center for Policy and Research at AHIP, said heart disease and diabetes patients in California had lower readmission rates because of MA plans.

It’s premature to categorize all MA plans, he said.

“Unnecessary hospitalization is the low-hanging fruit of quality and cost containment,” said Robert Berenson, MD, senior fellow at The Urban Institute.

Inpatient visits remain consistent with rates from traditional plans, but the data shows large swings for outpatient visits due to un-recordable activities such as Internet visits, phone calls and e-mails with physicians.
“We want to improve FFS in respect to Medicare Advantage,” said Lemieux.