KHN Morning Briefing

Summaries of health policy coverage from major news organizations.

Medicare Boosts Rather Than Cuts Payments To Advantage Plans

The insurance industry won a major lobbying victory Monday after the Obama administration backtracked on an earlier plan to cut Medicare Advantage payments to insurers by 2.2 percent in 2014 and instead decided to give them a 3.3 percent increase.

The Wall Street Journal: Medicare Advantage Insurers Win Round
Health insurers stand to get significantly more money for running Medicare Advantage plans next year than they had feared, according to new government rates announced late Monday. The final announcement appeared to significantly improve on a mid-February proposal that featured unexpectedly sharp cuts and prompted a busy lobbying effort from health insurers. Companies that sell the plans, such as Humana Inc., warned that cutting funding too much would hurt benefits for seniors while driving plans out of some markets. The warnings and the lobbying push drew substantial support in Congress, where at least 160 lawmakers signed letters to regulators urging industry-friendly changes (Kamp, 4/1).

The Washington Post: U.S. To Boost Rather Than Cut Payments To Health Insurers
The Obama administration reversed itself Monday, scrapping plans to cut by 2.2 percent the rates paid to health insurers that take part in the Medicare Advantage program. The insurance industry and more than 100 members of Congress had objected to the cut in the per capita growth rate, which was proposed in February. They argued that the administration was using faulty methodology. The insurers mounted a vigorous campaign, using television ads and phone banks, to persuade lawmakers to oppose the reduction (Somashekhar, 4/1).

The Associated Press: CMS Softens Medicare Advantage Funding Changes
Medicare Advantage customers may not see the drastic benefit cuts or premium hikes next year that insurers have been warning about after all. Health insurers had predicted big, painful changes for many of their Medicare Advantage customers after the federal government said in February that the amount it pays per person for the popular coverage could fall more than 2 percent in 2014. The Centers for Medicare and Medicaid Services then changed course on Monday and said it now expects that the cost per person to climb more than 3 percent (Murphy, 4/1).

The Hill: HHS Scraps Proposed Cuts To Private Medicare Plans
The insurance industry won a major lobbying victory Monday as the federal Medicare agency scrapped a proposed cut to Medicare Advantage plans. The Health and Human Services Department announced Monday that it will not follow through on a proposed cut to Medicare Advantage plans, which are administered by private insurers (Baker, 4/1).

Modern Healthcare: CMS Does About-Face On Medicare Advantage Payment Cuts
Apparently swayed by insurers and lawmakers, the CMS backtracked on an earlier plan to cut Medicare Advantage payments to insurers by 2.2% in 2014 and instead decided to give them a 3.3% increase. The CMS ultimately agreed, according to a final payment policy issued today (PDF), that "it is a more reasonable expectation" that Congress will again act to avert the dramatic physician pay cut scheduled under Medicare's sustainable growth rate formula. A draft policy issued in February was based on the CMS' actuary's customary calculation based on current law (Block, 4/1).

Meanwhile, Medicare has proposed ending reimbursement for post-treatment PET scans in prostate cancer patients based on evidence it provides no useful information.

Modern HealthCare: Limited Funding
In an effort to scale back use of high-priced imaging of questionable value in cancer treatment, Medicare has proposed ending reimbursement for post-treatment positron emission tomography scanning in prostate cancer patients and limiting its use to one scan for most other cancer indications. Use of the technology, which involves injecting F-18 fluorodeoxyglucose (FDG) into the blood so the PET scan can identify regions of heightened metabolic activity, a sign of cancer metastasis, has grown sharply in recent years. The CMS, in giving preliminary approval to payments for the technology in 2005, required manufacturers and radiologists to establish a registry to monitor outcomes from its use. The evidence garnered from that registry convinced the CMS that the scans provided no useful information for oncologists treating prostate cancer patients who had already completed their initial therapy, according to the March 13 proposed decision memo (Lee, 3/30).

Medicare also announced it would allow an independent board of attorneys to decide whether it should cover sex-change surgery for some patients.

Medpage Today: CMS Flip-Flops On Sex Change Surgery
On the same day Medicare said it would reconsider whether to cover sex-change surgery for certain patients, officials shifted gears and will now allow an independent board of attorneys to make the judgment. The Centers for Medicare and Medicaid Services (CMS) announced Friday it would open a national coverage determination for gender-change surgery under Medicare for patients with gender identity disorder, otherwise known as severe gender dysphoria. Medicare currently does not cover the surgery; CMS last looked at the procedure in 1981 and decided that it was "experimental" and therefore could not be covered. But soon after CMS placed the call for public comments on the medical evidence of the procedure Friday afternoon, it removed the announcement from its website (Pittman, 4/1).

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