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Healthcare Reform Updates

MA Star bonuses

We recently told you that CMS was administratively overriding the healthcare reform act by making quality bonuses available to Medicare Advantage plans that are rated at 3 (average) in the Star quality assessment. Health reform called for rewards for only 4 and 5 Star plans. The problem: few would have qualified, which would have impacted seniors by reducing the revenue that would go toward added benefits and that also would have reduced cost-sharing for a majority in the program.

Such enhancements over traditional Medicare will already be curtailed due to major reductions in benchmarks over the next several years. The extra bonuses will infuse an unexpected $6.7 billion in the program and partially undo some of the savings counted on in the act.

The move will clearly benefit the program, insurers and seniors. But it has generated some unlikely critics, including GOP lawmakers who usually support the program and who attempted to shield MA from even deeper cuts just last year. The GOP says the Obama administration is trying to protect its image in political swing states in 2012, a charge the administration denies.

The other criticism: slowly but surely the savings that were supposed to make health reform a cost saver over the next 10 years are eroding.

In truth, there are probably political and policy reasons for the move by CMS. The political is obvious, but the agency also wanted to give more plans a chance to move the quality gauge. Limiting the bonuses to just 4 and 5 Star plans would have left most at a major disadvantage and with little hope or incentive of capturing bonus money in the future. While 80 percent of enrollees will be in plans that get bonuses for the next three years, the dollars are stratified. This gives lower scoring plans an incentive to move up on the quality scale to offset the overall reductions that are rolling out.

Medicare and Medicaid spending cuts

The recent proposals by both President Obama and the House GOP to curb spending in Medicare and Medicaid are generating negative reaction from the American public.

A number of new polls show that despite being increasingly concerned about rising federal debt and deficits, most Americans want to keep Medicare the way it is. Many also question making huge changes to Medicaid. In an ABC News-Washington Post poll, just 21 percent and 30 percent supported cuts to Medicare and Medicaid, respectively.

Most Americans are concerned about the overall size of government, but are generally reluctant to endorse cuts or changes to programs they may rely on. What has never been articulated by policymakers is that the generous Medicare and Medicaid structures are simply unsustainable over time. A lack of reform risks an inability to provide any quality coverage at all.

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, Commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel.

Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management, and administration.

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