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:4/28/2016)... Beach, FL (PRWEB) , ... April 28, 2016 , ... ... the spring season. Smart pots are frequently used by professional organic farmers and nurseries ... growers to order their supply of fabric pots. Our goal is to offer wholesale ...
(Date:4/28/2016)... ... April 28, 2016 , ... Cognizin® Citicoline ... 2016. , Nominated in the Healthy Ageing category, Cognizin® is being considered for ... Healthy Ageing division can include everything from antioxidants, lipids, proteins, and botanicals. NutraIngredients ...
(Date:4/28/2016)... , ... April 28, 2016 ... ... AnzuMedical™ Knowledge Sharing and Collaboration Platform™ , today announced a new Residency ... provide efficient access to medical knowledge, educational resources, and a host of ...
(Date:4/28/2016)... Tamarac, FL (PRWEB) , ... April 28, 2016 , ... ... body recovery supplement GlycoLoad at this week’s 2016 Europa Games Get Fit and ... health conscious consumers alike, the Europa Orlando Expo coming up April 29-30, was selected ...
(Date:4/28/2016)... ... April 28, 2016 , ... For the 10,000 Americans ... smarter about an important part of overall well-being: mental health. Now, a new book—Staying ... promote healthy aging and “cognitive vitality,” which can include everything from honing your memory ...
Breaking Medicine News(10 mins):
(Date:4/27/2016)... 2016   Zillion Group today announced ... platform, which specializes in live video consultation. Turning ... products, Zillion enables companies to realize the true ... take control of their health. ... including one-to-one, group and webcast scheduled or on-demand ...
(Date:4/27/2016)... , April 27, 2016  Bayer Animal ... a senior from the University of Florida College ... the Bayer Excellence in Communication Award (BECA). Brittany ... which were awarded a total of $70,000 in ... last four years, Bayer has provided a total ...
(Date:4/27/2016)... 2016 Research and ... Anesthesia Disposables Market 2016-2020"  report to their ... ,The global anesthesia disposables market is set ... during the period 2016-2020.  Healthcare-acquired ... patients, safety. Organizations like the CDC and ...
Breaking Medicine Technology: