Campaign 2010

Mar 02, 2006

Stonewall Johnson: Nancy Johnson Refuses to Address Billions in Overpayments to HMOs and PPOs

DCCC Press

Mar 2, 2006

Stonewall Johnson: Nancy Johnson Refuses to Address Billions in Overpayments to HMOs and PPOs

Rep. Nancy Johnson (R-CT), Chair of the Health Subcommittee in the House Ways and Means Committee, Refuses to Address the Findings of the Non-Partisan MedPAC Which CBO Estimates Would Save Over $50 Billion

Over $50 billion Savings if MedPAC recommendations were adopted

Over $50 billion Savings if MedPAC recommendations were adopted

$2.32 Price per gallon of gas in Connecticut

$505,257 Amount of money Nancy Johnson has taken from HMOs

(Washington, D.C.) – Yesterday, in the Health Subcommittee of the House Ways and Means Committee, something startling happened: subcommittee Chair Nancy Johnson just flat out refused to address the fact that HMOs and PPOs received over $50 billion dollars in overpayments. Congresswoman Johnson refused to discuss a 2005 report by the independent federal body, MedPAC, whose recommendations could translate into $50 billion in savings over the next 10 years.

“Nancy Johnson could have done something about more than $50 billion in overpayments to HMOs and PPOs, but unfortunately she took a pass and refused to even discuss the issue in her committee,” said Sarah Feinberg, press secretary for the Democratic Congressional Campaign Committee. “It’s shocking that Nancy Johnson doesn’t think Connecticut families could use $50 billion in savings when gas prices are through the roof, home heating costs are up, and prescription drug prices are rising at astronomical rates. Unfortunately, Connecticut families are getting all too used to Nancy Johnson’s stonewalling on issues that matter most to them.”

The Congressional Budget Office estimated that implementing some of the recommendations of MedPAC would yield over $50 billion in savings over the next 10 years.

Some of MedPac’s Proposals Include:

Eliminating the PPO Slush Fund. The law that created the special interest Medicare drug Plan in 2003 created a “slush” fund that has since proven superfluous. Since this fund is not needed, MedPAC recommended eliminating it.

Eliminating Overpayments to HMOs. Right now, HMOS are paid an average of 115% of traditional Medicare rates. As a result, the government actually loses money for every person who enrolls in a HMO Medicare Advantage plan.

Eliminating Double Payments to HMOs. Currently HMOs receive double payments for Indirect Medical Education but not only do they engage in virtually no teaching, they also do not pass along the money to teaching hospitals in their networks. If these double payments were eliminated, more savings would be created.

Adjust Payments to Reflect the Health of the Patient. MedPAC recommended adjusting plan payments to reflect the health of enrollees. The policy would give higher payments for sicker patients and lower payments for healthier patients, with savings accruing to the government.