Navigation Links
Study identifies flaws in Medicare prescription drug program
Date:10/28/2010

Millions of Medicare recipients have been forcibly reassigned to different prescription drug plans because Part D reimbursements to insurance companies covering low-income patients are lower than the actual costs incurred, according to a study released online today by Health Affairs. The report describes how a system designed to encourage competition and to subsidize care for low-income Medicare patients instead has led companies to raise their premiums in an effort to price themselves out of the low-income segment of the Part D market.

"These insufficient payments create a perverse incentive for plans to avoid or shed low-income patients," says John Hsu, MD, of the Mongan Institute for Health Policy (IHP) at Massachusetts General Hospital (MGH), lead author of the study. "Millions of our poorest elderly have been reassigned to different drug plans since the program began. These patients often have limited income and multiple medical conditions requiring several medications, so they can ill afford the turmoil associated with changing drug plans."

Medicare Part D prospectively pays private insurance companies to provide prescription drug coverage. That payment is risk-adjusted based on each patient's diagnoses during the prior year. Most Medicare patients choose their own Part D plan from available options and pay an individual premium in addition to the amount paid by Medicare. For low-income patients, Medicare fully or partially subsidizes premiums and copayments and also assigns these patients to one of the least expensive available plans. Low-income patients tend to need more prescription drugs, so Medicare's payments to the companies are increased by 8 percent for fully subsidized patients and 5 percent for partially subsidized patients.

Hsu explains, "The original hope was that private plans would compete for all Medicare patients by lowering premiums or at least limiting premium increases. The lower-cost plans would benefit by attracting more patients overall and also by receiving generous subsidies for covering many low-income patients. Unfortunately, this hope has not become reality. Instead, the system induces companies to play 'hot potato' with the poorest of our elderly."

The study analyzed actual prescription costs for millions of Medicare patients enrolled in a selection of Part D plans. Results showed that the costs for covering fully subsidized patients were 21 percent higher than for nonsubsidized patients, and costs for partially subsidized patients were 9 percent higher significantly more than the current payment increases of 8 and 5 percent, respectively. The researchers note that these discrepancies probably explain why each year fewer companies keep premiums low enough to stay in the subsidized, low-income market. Being assigned to a different plan may require changes to patients' drug regimens, since plans often cover different drugs for specific health problems, and require patients to learn a new system for obtaining their drugs.

"According to these findings, the Part D prospective payment should be revised to fix these perverse incentives," says Hsu, who is the director of the Clinical Economics and Policy Analysis Program at the Mongan IHP and on the faculty at Harvard Medical School. "This could be accomplished by increasing the subsidies for covering low-income patients or by improving the risk adjustment approach by, for example, incorporating information on prior drug use. But no matter what approach is taken, it is critical that there is careful monitoring of the actual incentives and of both intended and unintended consequences. This is true for Part D, as well as for the programs envisioned within the Patient Protection and Affordable Care Act."


'/>"/>

Contact: Sue McGreevey
smcgreevey@partners.org
617-724-2764
Massachusetts General Hospital
Source:Eurekalert

Related medicine news :

1. Despite Treatment, Employees with Depression Generate Higher Absentee Costs, According to Thomson Reuters Study
2. American Council on Exercise (ACE) Study Reveals Kettlebells Provide Powerful Workout in Short Amount of Time
3. TV drama can be more persuasive than news program, study finds
4. Study carried out into biological risks of eating reptiles
5. Neuroimaging study may pave way for effective Alzheimers treatments
6. Study finds racial gaps continue in heart disease awareness
7. Luth Researchs IndicatorEDG(TM) Study Finds Americans Hopes of Achieving Their Dreams Are Fading
8. First blinded study of venous insufficiency prevalence in MS shows promising results
9. Soothing infants with food focus of childhood obesity study
10. People with anxiety disorder less able to regulate response to negative emotions, study shows
11. American Heart Association Rapid Access Journal Report: Study Finds Racial Gaps Continue in Heart Disease Awareness, Low Knowledge of Heart Attack Warning Signs Among Women
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:2/24/2017)... ... February 24, 2017 , ... The Smart Machine Age ... Oxford University predict that 47 percent of all jobs in the United States may ... and “successful.” The day of the aggressive know-it-all who steamrolls over colleagues is drawing ...
(Date:2/24/2017)... Texas (PRWEB) , ... February 24, 2017 , ... ... to The Medical Center at Craig Ranch building at 8080 State Highway 121, Suite ... Medical District with easy access to Highway 121. , As the practice has grown, ...
(Date:2/24/2017)... ... , ... The California State University Institute for Palliative Care is ... in palliative care education and research. The Symposium, “Innovate. Investigate. Educate: Advancing Academic ... on Sept. 28 and 29, 2017, on the campus of California State University San ...
(Date:2/24/2017)... ... ... Indiana Fiber Network (IFN) President and CEO Kelly C. Dyer recently announced that he ... of the Management Committee when IFN was originally formed in 2002 where he was ... development of the business plan. He became the first paid employee of IFN ...
(Date:2/24/2017)... CA (PRWEB) , ... February 24, 2017 , ... ... for qualifying into the Senior International Elite division on February 12th. Ms. ... Around divisions at the elite qualifier competition held in Las Vegas, Nevada. Frida ...
Breaking Medicine News(10 mins):
(Date:2/24/2017)... 23, 2017  Directors from Pharma To Market Pty Ltd and ... forces, resulting in the founding of Pharma To Market Pte Ltd, ... Market are pleased to announce their expansion into Asia ... Singapore . The company are delighted to appoint Joelle ... Singapore based entity. Joelle brings with her ...
(Date:2/24/2017)... YORK , Feb. 23, 2017  The ... 330.6 million by 2021 from USD 275.9 million ... Read the full report: http://www.reportlinker.com/p04718602-summary/view-report.html ... increasing spending on pharmaceutical R&D, and growth in ... driving the market growth for particle counters. On ...
(Date:2/24/2017)... Feb 24, 2017 Research and Markets has ... and Strategies - 2016" report to their offering. ... The latest research Urinary ... data and benchmarks in the global Urinary Incontinence market. The ... are the key drugs marketed for Urinary Incontinence and their clinical ...
Breaking Medicine Technology: