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Title : Medicare Payoff Cuts?

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Medicare Payoff Cuts?

The highly profitable Medicare Advantage business is vulnerable to payment cuts to HMOs.

Any of yous that read this spider web log know that I accept been predicting big changes for the Medicare Advantage occupation concern always since the Democrats took command of the Congress--particularly for the controversial Private Fee-For-Service (PFFS) business office of the program.

But I accept oft felt lone inward that reckon thence a recent news flush from TheStreet.com coming to much the same decision caught my eye. It pretty much reflects my thinking on the subject:

• "Medicare Advantage players improve count their blessings piece they even thence can."
• It's non whether at that topographic point volition endure cuts but merely how deep.
• Private Fee-For-Service plans, too the few companies who emphasize them, are especially vulnerable.
• Medicare Advantage payments hold to endure the plump target Congress needs to abide by a agency to gear upwards the Medicare physician fee problem that is on autopilot to cutting doctor payments 15% past times Jan 1, 2009.
• If Medicare Advantage companies saw their payments equalized amongst the traditional Medicare program, they would meet their reimbursement autumn past times $65 billion over the side past times side v years too $160 billion over the side past times side ten.
• "Clearly, thence investors should weigh both a company's exposure to MA in full general too to PFFS inward item earlier placing their bets side past times side yr [2008]."

The Medicare HMOs dodged a bullet end month when Congress decided non to cutting the MA programme to gear upwards the Medicare physician fee problem. But the bad word is that they decided to gear upwards the fee occupation for merely vi months too cuts from 2007 too 2008 merely got deferred until July 1. On peak of that, at that topographic point is about other cutting scheduled for Jan 1, 2009--a full of 15% inward cuts.

The Medicare Advantage payment problem hasn't been solved, it has merely been made to a greater extent than critical.

From the looks of Medicare Advantage-heavy HMOs' percentage prices, there's obviously lots of sand on Wall Street too a corking many people accept their heads buried inward it.

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