Fee-for-service Medicare Advantage plans came under heavy fire at a Senate hearing last week with members of the panel, healthcare providers and an official of a Medicare advisory board all voicing concerns about accountability, marketing practices and high costs.
The criticism was summed up during the hearing before the Senate Finance Committee by Sen. Ron Wyden, D-Ore., a member of the panel.
He compared the current market for private fee-for-service Medicare Advantage plans as being "like Dodge City before the marshal showed up."
But, at the same time, no industry officials were on hand to defend the program, and Sen. Max Baucus, D-Mont., opened the hearing by noting that fee-for-service Medicare Advantage plans have grown significantly, by nearly 1,000% in just over two years.
And Baucus later said he will hold another hearing on the issue that will focus on market abuses.
But, he noted in his opening statement that in Montana, more than 90% of all Medicare Advantage enrollees are in private fee-for-service plans, rather than in the health maintenance organizations or preferred provider organizations."
"Most rural areas have similar statistics," Baucus said. "Even urban and suburban areas with historically high enrollment in private plans have seen the most explosive growth from new private fee-for-service plans."
Among the reasons for this growth, he said, is that fee-for-service plans are not required to have relationships with providers or provider networks and are not required to share data about the quality of care.
Additionally, Baucus noted that "the centers for Medicare and Medicaid Services cannot oversee and regulate the benefits of private fee-for-service plans as they do other Medicare Advantage plans."
Effectively, Baucus argued, the reasons for the growth of such plans have also been the reason for the problems that providers and beneficiaries have experienced, a sentiment echoed by the committee's ranking member, Sen. Charles Grassley, R-Iowa.
"First, the plans have little accountability, either by contract or in statute," Grassley said.
"Providers are frustrated and oversight is difficult. Second, in some areas, beneficiaries report that their hospitals and doctors will not treat them because they do not accept patients in private fee-for-service plans. And third, it appears that some employers are using these plans to lower their own costs for retiree coverage, but at taxpayer expense."
Testifying before the committee, Mark Miller, the executive director of the Medicare Payment Advisory committee, said that initially, private plan participation in Medicare was intended to allow companies to help achieve greater efficiency through care coordination and other innovations.
