NHPF Forum Session Meeting Announcement From 10 to 50: Options for Medicare Advantage Plan Regions A DISCUSSION FEATURING: Michael J. O Grady, PhD Assistant Secretary for Planning and Evaluation U.S. Department of Health and Human Services Leslie M. Greenwald, PhD Senior Scientist RTI International WITH COMMENTS FROM: Mark Hayes Health Policy Director Committee on Finance, Republican Staff U.S. Senate Elizabeth J. Fowler, JD, PhD Chief Health and Entitlements Counsel Committee on Finance, Democratic Staff U.S. Senate Len M. Nichols, PhD Vice President Center for Studying Health System Change Cybele Bjorklund Staff Director Subcommittee on Health, Democratic Staff Committee on Ways and Means U.S. House of Representatives Kathleen Weldon Professional Staff Member Subcommittee on Health, Republican Staff Committee on Ways and Means U.S. House of Representatives Friday, September 17, 2004 11:45 am Lunch 12:15 2:00 pm Discussion Reserve Officers Association of the United States One Constitution Avenue, NE Congressional Hall of Honor Fifth Floor (Across from the Dirksen Senate Office Building) To register: Please call Tiombé Diggs at 202/872-1392 as soon as possible. Space is limited.
From 10 to 50: Options for Medicare Advantage Plan Regions On the bumpy road from Medicare risk to the newly renamed Medicare Advantage (MA) program, Medicare managed care plans have scurried to keep up with policymakers efforts to inject competition into the Medicare program. Well, ladies and gentlemen, fasten your seatbelts; the road is about to get rougher! With the advent of the MA program, which replaces and expands Medicare+Choice, the secretary of the Department of Health and Human Services (DHHS) literally has to draw the map for the geographical boundaries of 10 to 50 areas within which new regional MA plans have to compete for business. And he must do so by January 1, 2005. Existing Medicare+Choice plans (which are based at the county level) are now referred to as local MA plans. The new MA regional plans, also established under Title II of the MMA, are intended to encourage private plans to serve Medicare beneficiaries in larger regions, especially in rural areas. 1 Participating MA regional plans must serve the entire region. Beneficiary premiums for MA regional plans cannot vary within the region. The Centers for Medicare and Medicaid Services (CMS) held an open public meeting on July 21, 2004, to discuss these regional options. In its notice announcing the meeting, CMS stated that the success of Medicare s prescription drug benefit will depend on the willingness of private plan operators to offer plans in the various regions and therefore, at least in part, on the region definitions selected by CMS. 2 Forum Session Manager Nora Super Principal Research Associate SESSION OVERVIEW This meeting will provide an overview of the new regional Medicare Advantage (MA) plans as envisioned by the Medicare Prescription Drug, Improvement and Modernization Act (MMA) of 2003 (P.L. 108-173). To implement the MA program, the secretary of health and human services must define appropriate regions for MA regional plans. The MMA calls for the creation of 10 to 50 MA regions within the 50 states and the District of Columbia by January 1, 2005. Speakers will discuss the options being considered by the secretary; a panel of staff members from Capitol Hill will comment. National Health Policy Forum 2131 K Street NW, Suite 500 Washington DC 20037 202/872-1390 202/862-9837 [fax] nhpf@gwu.edu [e-mail] www.nhpf.org [web] Judith Miller Jones Director Sally Coberly Deputy Director Monique Martineau Publications Director NHPF is a nonpartisan education and information exchange for federal health policymakers. 2
Faced with a tough political decision that will make winners of some and losers of others, the department seems determined to get the best analytical advice it can from trusted consultants. MMA requires that, before establishing MA regions, the secretary must conduct a market survey and analysis, including an examination of current insurance markets, to determine how the regions should be established. 3 To fulfill this requirement, in part, the secretary retained the services of RTI International and the Center for Studying Health System Change. SPEAKERS This Forum session will begin with an overview of the requirements of the law and the features left to the secretary s discretion. Representatives from RTI International and the Center for Studying Health System Change will discuss the work they are doing on behalf of DHHS. Michael J. O Grady, PhD, is the assistant secretary for planning and evaluation at DHHS. As such, he is the principal advisor to the secretary on policy development in health, disability, aging, human services, and science and data, and he provides advice and analysis on economic policy. Working together with CMS, the Office of the Assistant Secretary for Planning and Evaluation is advising the secretary on MA regions. Leslie M. Greenwald, PhD, is a senior scientist at RTI International. Dr. Greenwald joined RTI International in 1991 after 11 years at the Health Care Financing Administration (now CMS). At RTI, Dr. Greenwald serves as a project director and task leader for a range of CMS projects. Len M. Nichols, PhD, is vice president of the Center for Studying Health Systems Change. Dr. Nichols is a health policy expert who has written and published extensively on a variety of topics, including insurance market regulation, the effect of tax policy on health insurance purchase decisions, and private insurance options for Medicare. DISCUSSANTS Following the three lead presentations, a bipartisan, bicameral panel of representatives from Capitol Hill will provide comments. Mark Hayes is the health policy director of the Senate Finance Committee majority staff for Chairman Chuck Grassley (R-IA). A pharmacist by profession, Dr. Hayes was in 2003 health policy advisor to the committee and principal staff person on the majority committee staff for the Medicare prescription drug benefit and MA elements of the MMA, which was signed into law on December 8 of that year. 3
Cybele Bjorklund is the Democratic staff director for the House Ways and Means Subcommittee on Health. Previously, she served for nearly four years as deputy staff director for health policy for Sen. Edward M. Kennedy (D-MA) on the Senate Health, Education, Labor and Pensions Committee. Kathleen M. Weldon joined the professional staff of the House Ways and Means Health Subcommittee in March 2004. Her portfolio includes issues related to the Medicare Part D drug benefit, the MA program, disease management, and health care information technology. During the negotiation of the MMA, she served on the staff of the House Energy and Commerce Committee, where she was the committee s lead staff member for negotiations on the MA program. Liz Fowler has served as the chief health and entitlements counsel for the Democratic staff of the Senate Finance Committee, with responsibility for issues related to Medicare, Medicaid, SCHIP, and welfare since January 2001. Most recently, she played a key role in negotiating the MMA. KEY QUESTIONS Insurers have reportedly objected to the idea of multistate regions. 4 However, others have said they are necessary to ensure multiple competing plans. Are the two mutually exclusive? Does size ensure competition? If the secretary chooses a 50-state option, will there be any incentive to attract managed care to traditionally underserved areas, such as heavily rural states? How much does the size of the Medicare population in each region matter? Do local MA plans have an advantage or disadvantage over regional MA plans? Several metropolitan statistical areas (MSAs) currently cross state boundaries; however, MMA suggests that states should not be divided among regions. How can the DHHS achieve congressional objectives simultaneously? For example, is it better to keep states intact and split MSAs or to split states and keep MSAs intact? How many markets cross state boundaries? How does state-bystate insurance regulation add to the complexity and confusion of administering a national program? How likely will it be that prescription drug plan 5 regions will be the same as MA regions? What are the advantages and disadvantages of using the same regions? 4
ENDNOTES 1. P.L. 108-173, Title II, Sec. 1858(a)(2)(C). 2. Centers for Medicare and Medicaid Services, Department of Health and Human Services, Federal Register, 69, no.104, (May 28, 2004): 30659 30660. 3. P.L. 108-173, Title II, Sect. 1858(a)(2)(D). 4. Robert Pear, Insurers Object to New Provision in Medicare Law, New York Times, August 22, 2004; accessed August 22, 2004, at www.nytimes.com/2004/08/ 22politics/22medicare. 5. Prescription drug plans (PDPs) are private plans that would offer prescription drug insurance under the MMA. PDP regions are to be the same as MA regions to the extent practicable. However, the PDP regions do not necessarily need to be identical to the MA regions if it can be shown that a different configuration of regions for PDPs improves beneficiaries access to prescription drugs. 5