At a hearing on the Medicare Advantage program in February, Rep. John Dingell, D-Mich., chairman of the House Energy and Commerce Committee, said, “It’s time to stop overpayments to the insurance industry and use these funds to support the health of elderly and disabled Americans.”
As Congress raced out the door for an undeserved Fourth of July recess, it is unfortunate that Dingell didn’t say the same thing about a new program from the Centers for Medicare and Medicaid Services for competitive bidding for walkers, wheelchairs and other medical devices.
Dingell and another intense critic of the Medicare Advantage program, Rep. Pete Stark, D-Calif., support an amendment added to a Medicare bill that passed the House last week delaying for 18 months the new CMS competitive bidding program.
In studies done at the request of Dingell and Stark, analysts at the Congressional Budget Office have estimated that federal government costs for Medicare Advantage plan members may be 12% higher than costs for traditional Medicare.
Those studies have given rise to severe criticism of the program from the 2, but there were no similar comments about the medical device program. It would replace a current program where Congress sets the prices for this equipment, prices that CMS has determined are far higher than charged by private retailers.
For example, according to The New York Times, Wal-Mart’s Website lists a typical walker for $59.92. But Medicare pays about $110 for the walker.
According to current estimates, the projected annual savings of mandating competitive bidding nationwide is $1 billion to Medicare and $200 million in co-pays by beneficiaries, or approximately 26%.
But while pushing the amendment, Dingell and Stark had no problems with a provision in the legislation passed by the House that calls for cuts of $13.8 billion over 5 years in the Medicare Advantage program. The legislation is companion to a bill introduced in the Senate recently by Senate Finance Committee chairman Max Baucus, D-Mont., calling for the same cuts.
Despite veto threats if the program is touched, Democrats are focusing on cuts in Medicare Advantage to forestall a 10.6% cut in physicians’ payments under Medicare scheduled to go into effect July 1.
So, why the angst over the program? The problem is not its effectiveness, but its patrimony. Democrats have had Medicare Advantage in their crosshairs ever since they took control of Congress in January 2007.
There is no question that there have been some abuses in marketing of Medicare Advantage plans, and that tighter regulation is necessary.
But at the same time, there is universal agreement that the program works. The source of the cuts, Sen. Baucus, recently noted at another hearing, was that fee-for-service Medicare Advantage plans have grown significantly, by nearly 1,000% in just over two years.
The key here is ‘out with the old, in with the new.’ The program was upgraded through the Medicare Modernization Act of 2003, which was shoved through the Congress by an aggressive and determined Republican majority aided and abetted by an equally motivated Republican president.
Also placing it in Democrats’ crosshairs was the comment in Congress Daily sometime ago describing it “as the Republicans’ signature program” since the GOP took control of Congress in 1995.
It is, and the reason it is successful, as is the prescription drug program under Medicare that was created by the same legislation, is that the execution was turned over to private industry incentivized to succeed by competition.
That success cannot be sustained by the uncertainty created by legislators who make decisions based on rewarding friends and punishing enemies, and whose best skills lay in kicking critical decisions down the road.