News in brief - June 26, 2006

Md. physicians call for investigation to see if insurers have pricing monopoly - Medicare drug enrollment surges - Medicare managed care payments

Md. physicians call for investigation to see if insurers have pricing monopoly

MedChi, the Maryland State Medical Society, in May asked State Attorney General J. Joseph Curran to investigate possible monopolistic pricing practices by several health insurers. The move came after reimbursement cuts by CareFirst BlueCross BlueShield, the state's largest health insurer.

In a letter to Curran, MedChi said CareFirst and other dominant insurers appear to "have a common strategy and a common goal of reducing payment to physicians and other providers, with the result of forcing independent physician practices out of business and requiring hospitals to support them."

Last month, CareFirst announced that it was cutting payment rates for laboratory, radiology and other ancillary services beginning July 1.

CareFirst spokesman Jeff Valentine denied the allegations, saying, "We don't feel it's appropriate for CareFirst members to pay more for health care services than competitor health plans."

Kevin Enright, spokesman for the attorney general's office, confirmed receipt of the letter and said Curran had asked both sides to submit more information regarding their arguments.

Medicare drug enrollment surges

More than 2 million Medicare beneficiaries enrolled in the program's drug benefit in the final 15 days leading up to last month's deadline, federal officials reported.

The last-minute surge brought the number of seniors and disabled people receiving government help with their drug bills to about 38.7 million, out of roughly 43 million who are eligible for the benefit.

Only about 11 million enrollees, however, signed up for a stand-alone drug plan. The remainder were automatically enrolled in a plan or received their coverage through a former employer, managed care plan or other source.

Medicare Part D numbers likely will not increase much until after Nov. 15, when the open enrollment period for the 2007 calendar year begins for all beneficiaries. Roughly 3 million beneficiaries who are eligible for special low-income subsidies can sign up before then even though they missed the deadline, and those turning 65 can enroll in drug coverage as soon as they join Medicare.

Medicare managed care payments

Per-beneficiary payments to Medicare Advantage plans are 11% higher on average than what the government pays for seniors enrolled in the fee-for-service portion of the program, the Medicare Payment Advisory Commission reported.

In 2004, the last time MedPAC determined average managed care payments compared with fee-for-service payments, private insurers participating in Medicare were found to be receiving an average per-beneficiary payment that was 7% higher than the regular rate.

The commission said in its latest report that this figure would have been even higher had it accounted for the relatively better health of Medicare managed care patients.