News in brief - Feb. 2, 2004

Medicare health plan pay to increase - Report finds problems with payment for assistants at surgery - Abbott settlement funds help state Medicaid programs

Medicare health plan pay to increase

Medicare managed care plans will get an average 10.6% increase in payments, the Centers for Medicare & Medicaid Services has announced. The increase, effective March 1, includes funds passed as part of the Medicare reform law last year.

Plans participating in what will now be called Medicare Advantage must use the additional funds to cut beneficiary costs, enhance benefits, stabilize or expand physician networks, or create reserve funds against future premium increases or benefit reductions.

The announcement renewed Democratic criticisms that Republicans are trying to privatize Medicare. "Yet again, Republicans have crafted a sweetheart deal for HMOs and the insurance industry that comes at the expense of beneficiaries and taxpayers," said Rep. Fortney "Pete" Stark (D, Calif.). "Medicare HMOs were already substantially overpaid."

Report finds problems with payment for assistants at surgery

Medicare should incorporate all payment for assistants at surgery into the hospital inpatient prospective payment system, the General Accounting Office said in a report to Congress. Medicare pays for assistants under the hospital payment system and the physician fee schedule, creating coordination problems.

"Hospital payments for surgical care are not adjusted when an assistant receives payment under the physician fee schedule," the GAO said in the report. "Medicare may be paying too much for some hospital surgical care."

Abbott settlement funds help state Medicaid programs

Financially strained state Medicaid programs in January began receiving money from a $414 million nationwide settlement with Abbott Laboratories.

The Illinois-based company agreed to the settlement to resolve allegations that it had defrauded state Medicaid and federal programs in the way it marketed its enteral feeding pumps. States are sharing in nearly $50 million. The federal government is receiving nearly $365 million.