Medicare IssuesIt is NOT the aim of Americans for Medicare in Mexico, A.C. (AMMAC) to advocate for wholesale changes or restructuring of Medicare administration. There are reasonable arguments that major changes are called for. It seems likely that changes are coming, as there is significant support in Congress for addressing the many criticisms of the program. But AMMAC is currently focused squarely on the issue of bringing Medicare benefits to eligible seniors in Mexico. To broaden our mandate would dilute our message, and make success of our central goal much less likely.

Senators and leading health care experts say that Medicare will become the test lab for changes aimed at making the overall health care system less wasteful. That may sound more than a little counterintuitive. The fraud and waste in the Medicare Program are legendary. But what is less understood is that in many instances, it is Medicare's use of private entities, and under funding for administrative oversight that are at the root of this problem.

One example involves the relatively new Medicare Part D, a $60 billion prescription drug coverage program. The Centers for Medicare and Medicaid Services (CMS), which supervises the program, contracts with private insurance companies to provide the drug coverage.

In January 2009, Sen. Claire McCaskill (D-MO) wrote to Medicare administrators, after learning a large majority of the insurance companies participating in the program owed Medicare about $4.6 billion for 2006 alone. As a result of insurer "errors", some beneficiaries had been overcharged. The inspector general for the Department of Health & Human Services, which oversees Medicare, reported that the overcharges were due to mistakes in the bids that insurance companies submit to Medicare to participate in the drug program. Those bids represent estimates of how much revenue the companies would need monthly to provide the basic drug benefit. Medicare is supposed to audit those bids, but the agency is behind in the audits.

At a Senate hearing in late April, it was revealed that a quarter of all the bids for 2006 and 2007 contained "mistakes" that led to higher profits for the insurance companies, and higher costs for subscribers.

Congress is considering significant changes to Medicare administration, which will hopefully address these types of issues. It is clear that the complex system, under-resourced in the area of auditing and administration, has become an invitation to private contractors to pad their bottom lines, with the knowledge that they are unlikely to be caught.

One new approach being proposed for Medicare will stress closer follow-up care by doctors and nurses. It is hoped this will keep chronically ill patients from having to be hospitalized repeatedly. According to a large study, one in five Medicare patients must return to the hospital within a month of discharge. This costs billions of dollars a year, and results in poor health outcomes for seniors. The findings suggest patients aren't told enough about how to take care of themselves and stay healthy before they go home. A few simple things -- like making a doctor's appointment for departing patients -- can help.

Democratic Sen. Max Baucus of Montana says that Medicare is going to be "the driver" for quality improvements throughout the health care system because private insurers follow Medicare policies. Baucus is chairman of the Senate Finance Committee, which began work on Tuesday on a bill to cover the uninsured and to restrain health care costs. Thus far, it is not clear that Sen. Baucus will be supporting a public option that Americans could buy into to cover health expenses. And even if a public option is approved, it may still operate through private contractors, as Medicare does.

What does seem clear from the Baucus plan is that Medicare will still operate by contracting with private entities. Since the beginning of the Medicare program, CMS has contracted with private companies to operate as intermediaries between the government and medical providers. These contractors are commonly already in the insurance or health care area. Contracted processes include claims and payment processing, call center services, clinician enrollment, and fraud investigation.

Our discussions with Members of Congress, as well as with health policy experts and Medicare administrators, makes it clear that any Demonstration Project in Mexico will necessarily be administered under the same general rules as Medicare operates under in the U.S. As a result of extensive meetings in Washington DC during March and April of 2009, AMMAC determined it would be counterproductive to seek a waiver of the general manner under which Medicare is administered.

What does all this mean for Medicare beneficiaries in Mexico, and for the cost of health care services? Thus, an intermediary will be required to manage the program in Mexico. That means that one of the key requirements for Medicare participation is occurring anyway. Bringing Medicare to Mexico will only encourage adoption of reforms already underway in the Mexican health care system.

Link for more information: http://en.wikipedia.org/wiki/Medicare_(United_States)