From Politics To Policy: A New Payment Approach In Medicare Advantage

Robert A. Berenson ¹^*

¹ Bob Berenson is a senior fellow at the Urban Institute in Washington, D.C., and was the head of health plan contracting at the Centers for Medicare and Medicaid Services from 1998 to 2000.

^*Corresponding author.

Abstract

While the Medicare Advantage program's future remains contentiouspolitically, the Medicare Payment Advisory Commission's (MedPAC's)recommended policy of financial neutrality at the local levelbetween private plans and traditional Medicare ignores localmarket dynamics in important ways. An analysis correlating planbids against traditional Medicare's local spending levels likelywould provide an alternative method of setting benchmarks, byproducing a blend of local and national rates. A result wouldbe that the rural and lower-cost urban "floor counties" wouldhave benchmarks below currently inflated levels but above whatfinancial neutrality at the local level--MedPAC's approach--wouldproduce. [Health Affairs 27, no. 2 (2008): w156-w164 (publishedonline 4 March 2008; 10.1377/hlthaff.27.2.w156)]

Key Words: Health Reform, Managed Care - Consumers, Managed Care - Medicare, Medicare, Physicians, Variations

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From Politics To Policy: A New Payment Approach In Medicare Advantage

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