ADVISORY

FROM THE COMMITTEE ON WAYS AND MEANS

SUBCOMMITTEE ON HEALTH

Chairman Stark Announces a Hearing on Medicare Advantage Private Fee-For-Service Plans

House Ways and Means Health Subcommittee Chairman Pete Stark (D-CA) announced today that the Subcommittee on Health will hold a hearing on Medicare Advantage Private Fee-For-Service plans.  The hearing will take place at 2:00 p.m. on Tuesday, May 22, 2007, in Room 1100, Longworth House Office Building.

In view of the limited time available to hear witnesses, oral testimony at this hearing will be from the invited witness only.  However, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing.

BACKGROUND:

Private Fee-For-Service (PFFS) plans have been available in Medicare since the Balanced Budget Act of 1997 (P.L. 105-33), but have experienced enormous growth following Medicare Advantage (MA) payment increases made by the Medicare Modernization Act of 2003 (P.L. 108-173).  In 2003, less than 26,000 beneficiaries were enrolled in PFFS plans, but by April 2007 that number had exploded to nearly 1.5 million – a growth of more than 5600 percent. Exponential growth in PFFS raises numerous policy concerns.

According to the Medicare Payment Advisory Commission (MedPAC), MA Plans are paid on average 112 percent of fee-for-service Medicare. However, PFFS plans are located in geographic areas where payments are on average 119 percent of what it would cost to care for the same beneficiaries in traditional Medicare. Continued enrollment growth in these overpaid plans results in increased premiums for all Medicare beneficiaries and shortened solvency of the Hospital Insurance Trust Fund.

Private Fee-For-Service plans are very different from other MA plans.  They are exempt from many of the rules and reporting requirements that apply to other MA plans. For example, PFFS plans are not required to: collect and report Health Plan Employer Data and Information Set (HEDIS ®) quality data; coordinate care; conduct utilization review; or, have standards for timeliness of access to care.  These plans generally do not have a network of providers, and advertise the ability of enrollees to choose any provider.

The law requires PFFS to pay non-contract providers at least the original Medicare rate. Providers, however, are not required to accept PFFS plan enrollees, and physicians can balance bill patients beyond the plan payment.  Some providers around the country have refused treat patients in PFFS plans.  Like other MA plans, PFFS plans have widely varying co-payment structures that may lead to increased or decreased out of pocket costs for beneficiaries depending on what type of care is required.

Advocates for senior citizens and insurance commissioners across the country have reported numerous abuses by insurance agents and brokers selling PFFS plans.  According to reports, some beneficiaries have been enrolled in PFFS plans with little or no knowledge of what they were signing up for.  Beneficiaries have also reported surprise when learning their preferred provider will not accept their PFFS plan.

In announcing this hearing, Chairman Stark said: “The alarming growth in Private-Fee For-Service plans raises serious questions about their effect on the Medicare program. These plans are paid an average of 119 percent of traditional fee for service, even though beneficiaries are being told PFFS plans are no different than traditional fee-for-service Medicare.  It is our duty to investigate the exponential growth and continued overpayments to PFFS plans, and to ensure beneficiaries are protected and taxpayer dollars are spent wisely.”

FOCUS OF THE HEARING:

The hearing will focus on Medicare Advantage Private Fee-For-Service plans.  

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

Please Note:  Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee website and complete the informational forms.  From the Committee homepage, http://waysandmeans.house.gov, select “110th Congress” from the menu entitled, “Committee Hearings” (http://waysandmeans.house.gov/Hearings.asp?congress=18).  Select the hearing for which you would like to submit, and click on the link entitled, “Click here to provide a submission for the record.”  Once you have followed the online instructions, completing all informational forms and clicking “submit” on the final page, an email will be sent to the address which you supply confirming your interest in providing a submission for the record.  You MUST REPLY to the email and ATTACH your submission as a Word or WordPerfect document, in compliance with the formatting requirements listed below, by close of business Tuesday, June 5, 2007.  Finally, please note that due to the change in House mail policy, the U.S. Capitol Police will refuse sealed-package deliveries to all House Office Buildings.  For questions, or if you encounter technical problems, please call (202) 225-1721.

FORMATTING REQUIREMENTS:

The Committee relies on electronic submissions for printing the official hearing record. As always, submissions will be included in the record according to the discretion of the Committee. The Committee will not alter the content of your submission, but we reserve the right to format it according to our guidelines. Any submission provided to the Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response to a request for written comments must conform to the guidelines listed below. Any submission or supplementary item not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.

1.   All submissions and supplementary materials must be provided in Word or WordPerfect format and MUST NOT exceed a total of 10 pages, including attachments.  Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official hearing record.

2.  Copies of whole documents submitted as exhibit material will not be accepted for printing.  Instead, exhibit material should be referenced and quoted or paraphrased.  All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee.

3.  All submissions must include a list of all clients, persons, and/or organizations on whose behalf the witness appears.  A supplemental sheet must accompany each submission listing the name, company, address, and telephone and fax numbers of each witness.

Note:  All Committee advisories and news releases are available on the World Wide Web at http://waysandmeans.house.gov.

The Committee seeks to make its facilities accessible to persons with disabilities. If you are in need of special accommodations, please call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four business days notice is requested). Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above.

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