Private fee-for-service (PFFS) Medicare Advantage plans will be paid an average 16.6 percent more in 2008 compared to what the same enrollees would have cost in the traditional Medicare fee-for-service program, according to a new report from The Commonwealth Fund. Although Congress made significant revisions to policies that affect how PFFS plans operate in 2011 and thereafter, the legislation is expected to slow enrollment in PFFS plans but not stop the overpayment for each enrollee.
In the new report, Brian Biles, professor of health policy at George Washington University, and colleagues estimate that extra payments to PFFS plans will amount to $1,248 per beneficiary over traditional Medicare costs for each of about 2 million Medicare beneficiaries enrolled in PFFS plans, for a total of more than $2.5 billion in 2008.
"The legislation passed this year does not adequately address the overpayment problem in private fee-for-service Medicare Advantage plans," said Commonwealth Fund President Karen Davis. "While new requirements will eliminate some of the higher payments to plans and strengthen reporting requirements, we need to determine whether these plans are the best use of limited Medicare dollars."
