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Medicare PPOs Face Challenge to Funding

MANAGED CARE May 2005. © MediMedia USA
News and Commentary

Medicare PPOs Face Challenge to Funding

MANAGED CARE May 2005. ©MediMedia USA

All the excitement in the industry about Medicare PPOs died in a hurry last month as the Medicare Payment Advisory Committee (MedPAC) moved closer to recommending that the $10 billion fund for the program be eliminated.

MedPAC voted to adopt a draft recommendation that lawmakers eliminate the fund in order to help slow the growth of the federal budget deficit.

The recommendation surprises many who've been watching how Medicare reform unfolds. The 17-member MedPAC admits that the move could mean less participation in Medicare Advantage on the part of health plans, and that in turn would mean less access to such plans for the elderly.

This point was not lost on Mohit Ghose, a spokesman for America's Health Insurance Plans.

"It's kind of unfortunate that at a time when Congress and the administration have worked so hard to modernize a program that was stuck in the 1965 structure, MedPAC has decided to make recommendations that would take us back in time."

Expect a fight on this.