GAO: More federal money has not improved HMO-Medicare program.

Wednesday, December 5th 2001, 12:00 am

By: News On 6

WASHINGTON (AP) _ A year after Congress passed a multibillion dollar package to increase services for Medicare recipients enrolled in HMOs, congressional investigators say the additional money has produced little improvement.

HMOs called the report ``flawed and inaccurate.''

But Democratic House members, who requested the report, pointed to the report as reason for Congress to be cautious about sending more dollars to the industry.

``Congress continues to pour more money into the coffers of Medicare HMOs in hopes of providing better care to America's seniors, but the HMOs keep stranding hundreds of thousands of beneficiaries annually by either leaving the program or dramatically reducing benefits,'' said Rep. John Dingell, D-Mich.

``It is foolish to even consider throwing more money at this failed system,'' added Dingell.

The report issued Tuesday by the General Accounting Office said that only about 29 percent of the health care plans improved benefits after receiving the additional money under the new law.

Lawmakers also had hoped the new funding would lure health plans back to areas where service had been discontinued. But the GAO found the additional payments ``had little effect on the availability'' of health plans.

Karen Ignani, president of the American Association of Health Plans, said Congress did not target money to regions where seniors live in large numbers, like Florida and California.

She said that Congress also did not come up with all the money promised and ``is starving the program.''

Medicare chief Tom Scully told a House Ways and Means subcommittee Tuesday that the additional money had mostly gone to areas with low enrollment in the program.

He also acknowledged that ``annual increases in federal ... funding have failed to reflect rising health care costs'' and that ``it is clear that much more needs to be done.''

About 14 percent of Medicare's beneficiaries are enrolled in health plans. Many have opted for the Medicare HMOs, which offer extra benefits that the traditional Medicare plan does not, including prescription drug benefits and vision care.

But since cuts were made in 1997, many of the health plans have withdrawn from the program, complaining that Medicare is not paying them enough to participate.

Congress last year agreed to spend an extra $11 billion over five years on HMOs. But insurance companies say that's still not enough.

In September, the Department of Health and Human Services said that 58 health plans are withdrawing or cutting services in particular areas next year, meaning 536,000 seniors will have to find a new way to receive Medicare benefits.

``When are members of Congress going to recognize that plans only pull out of programs that are not working?'' Ignani said.

Separately, on Tuesday there were these developments:

_ The Centers for Medicare and Medicaid Services announced that individuals in the traditional Medicare program can enroll in a supplemental insurance policy, known as Medigap, without worrying about their medical history. They must leave their health plan by Dec. 31 and purchase the supplemental insurance by March 4.

_ The House by a 408-0 vote passed legislation that would ease many of the paperwork burdens and regulatory hurdles for Medicare health providers.