HCFA chief blasts plans to overhaul Medicare administration


HHBR Washington Correspondent

WASHINGTON – Health Care Financing Administration (HCFA; Baltimore) Administrator Nancy Ann DeParle told the Senate Finance Committee last week that the Medicare Preservation and Improvement Act of 1999, introduced by Sens. Bill Frist (R-NC) and John Breaux (D-LA), is a significant improvement over the reform plan advanced by Breaux and Rep. Bill Thomas (R-CA) through the Bipartisan Commission for Medicare Reform. But she said the agency is concerned about the plan’s proposal for a Medicare Board proposal, as well as several other features.

DeParle told the committee May 4 that proposals to fundamentally change the administration of Medicare by separating management of traditional fee-for-service Medicare from oversight of Medicare+Choice plans are misguided.

While the aim of those proposals may be to make the agency immune from political pressures, DeParle said, that goal will be impossible to achieve. "Politics are part of any major public or private institution, and no amount of restructuring can change that," she argued. Moreover, in a public program like Medicare, DeParle contended that politics is part of public accountability.

DeParle said the Frist/Breaux proposal would create a seven-member independent group not subject to any civil service or sunshine laws. The proposal would also require HCFA to submit a plan directly to Congress for approval every year, beginning in 2002. According to DeParle, that would not only put the board beyond the control of the Executive branch, it would put it beyond the control of Congress and Medicare beneficiaries themselves.

She said the administration is also concerned about the premium support proposal included in the plan, which she said would have the effect of increasing premiums for the traditional program from 25% to 47%, according to Medicare actuaries.

DeParle added that the General Accounting Office and the Congressional Research Service have found that traditional program premiums would increase. "The plan merges the Medicare trust fund caps general revenue for Medicare," DeParle told the committee. She said GAO estimates that will cause this new trust fund to become insolvent in 2008.