Should HHS Take from the Poor and Give to the Rich?

I find it interesting that CMS overpays for high risk or complex patients, even when there is overcoding and fraud via Medicare Advantage. Yet CMS will not pay more for truly complex patients across rural and underserved areas. The largest do well and the smallest struggle to survive. This is the payment design, the administration design, and the enforcement design. Behind each design and designer is a serious lack of awareness of the consequences for Americans most in need of care.

From NPR by Schulte - "Instead of winnowing out abusive corporations, all insurance participants were punished: The study said that a number of large Medicare health plans, which were not named, raised risk scores far above their peers. But the agency chose not to ferret out the worst offenders to discipline them. Instead CMS cut rates industrywide in 2010 by 3.41 percent to offset the jump in risk scores."

As noted in the NPR article, the Obama plan has cuts planned for Medicare Advantage, but history is on the side of no cuts and even some increases - and 53 Senators have signed on. Drug companies and insurance companies have both turned potential cuts into substantial gains.

CMS has done little about Medicare Advantage despite 12 billion in overbilling a year. The close relationship between CMS and insurance payers appears to have facilitated the abuses (Center for Public Integrity).

For some perspective regarding the massive dollar amounts, the waste in Medicare alone, a 604 billion program in 2013, was 50 billion. According to GAO, the contracted payment vendors share responsibility. GAO has listed Medicare as a high risk program for 20 years and has listed Medicaid for 12 years. The interventions to address fraud and waste have resulted in small change, usually promoted as great success by CMS. Fraud and waste continues to rise at 5 billion a year for Medicare or 10%.In December 2011, OIG found that CMS had not resolved or taken significant action toresolve 48 of 62 vulnerabilities reported in 2009 by CMS contractors specifically charged with addressing fraud.

CMS may not even be able to do much. It appears that highly organized corporations can find their way to more of the treasury with or without Congress. Constant attention to introduce legislation, prevent unwanted legislation, shape away harmful portions, and encourage the best interpretations - these are the actions that profit the biggest and most organized while leaving the rest behind.

Medicare Advantage since 2003 has not been equitable in distribution. MA tends to attract patients of advantage - the more urban, higher income, and higher cost of living areas have competitive plans rich with benefits - due to the substantial dollars shaped to insurance payers by their own process. The Medicare Advantage plans dwindle to few, or one less competitive, or none as population and income decline. It is an important principle of profit for insurers to insure those who do well and avoid those who are more costly or less healthy. Medicare Advantage has been a fine design for this purpose.

Experts continue to have a limited awareness of these important demographic differences in seniors and Medicare populations. Fixed income seniors must live in areas lower to average in costs - usually away from exclusive plans and facilities that concentrate where people, income, and health payments are concentrated.

The Office of Inspector General does not understand elderly or Medicaid demographics and may not understand where fraud and waste are more likely. Somehow OIG wants to save small change - 1 billion from Critical Access rural hospital payments. They were persuasive enough to gain the Obama budget recognition - more evidence of poor understanding of rural people, health access, and aberrant payment designs at the root of the problem. Critical Access payments are a small portion of total Medicare or hospital spending. These are payments that have clearly stopped widespread rural hospital closures for the past two decades (too late for a few hundred 1983 - 1992). The program is even more important with worsening payments and higher costs of delivery under new designs as modified by the Supreme Court (once or perhaps twice).

OIG should investigate where there is real money to be saved. Taking on the bigger and biggest would appear to be more rewarding. HHS should also perform duties in ways that do not further impair basic health access. After 30 years of declining health access, substantial changes are still needed.

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Global Fails Local But Local Focus Succeeds Globally

Domino Decline By Design - as ERs Close, Those Nearby Face Challenges, as Small or Rural Hospitals Close or Practices Where Needed...


Blogs indicate that primary care can be recovered and should be recovered.

Dr. Bowman is the North American Co-Editor of Rural and Remote Health. He was the founding chair of the Rural Medical Educators Group of the National Rural Health Association and the long term chair of the STFM Group on Rural Health.

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