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Baucus Blasts CMS, Announces CHIP Funding

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Senate Finance Committee Chairman Max Baucus is criticizing what he describes as “advocacy” by the Centers for Medicare and Medicaid Services for private Medicare plans.

A briefing that CMS officials held before a recent House Ways and Means Committee subcommittee hearing on Medicare Advantage fee-for-service plans promoted the point of view that “access to benefits is at stake if Medicare Advantage funding is cut,” Baucus, D-Mont., writes in a letter addressed to U.S. Health and Human Services Secretary Michael Leavitt.

The officials who led the CMS Medicare Advantage private FFS briefing, Acting CMS Administrator Leslie Norwalk and Abby Block, director of the CMS Center for Beneficiary Choices, and the documents the officials presented failed to explain that the plan administrators, not Congress, determine the level of extra benefits that the plans can provide, Baucus writes in the letter.

Only the level of the extra benefits would be affected by the proposed funding cuts, Baucus writes.

“I find it inappropriate that CMS, or any executive branch agency, would lobby in response to anticipated congressional action,” Baucus writes. “State-level MA information was shared with the press, but not offered to members of Congress or their staffs in advance” of the briefing.

“The Finance Committee has yet to consider legislation to reduce MA funding, making the preemptive nature of CMS’ action that much more unseemly,” Baucus writes.

The Medicare Payment Advisory Commission has recommended that Congress lower Medicare Advantage payment rates, and much of the House Ways and Means subcommittee hearing focused on the overpayment made by Medicare to private fee-for-service plans.

The commission estimated, in an analysis questioned by private insurers, that the private FFS plans get 19% more than basic Medicare plans for health coverage services and that some FFS plans are getting 50% more.

Under federal law, plans are required to spend 75% of the extra funds they receive on beneficiaries, either by lowering co-payments and premiums or by enhancing benefits. However, a CMS official acknowledged at the hearing that while CMS believes it can accurately assess how plans are spending the funds, it does not require any documentation of the way the funds are used.

In other health oversight news, Baucus and Sen. John Rockefeller, D-W.Va., chairman of the Senate Finance Committee’s health subcommittee, say they have secured emergency funding for the Children’s Health Insurance Program in a supplemental spending bill.

About 11 states say they are running out of the federal funding they need to provide CHIP coverage.

The program, which provides health coverage for 6.6 million U.S. children, is set to expire Sept. 30.

A supplemental spending bill will provide up to $650 million to fill in CHIP funding gaps while members of Congress negotiate reauthorization of the program, Baucus says.