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House panel examines Medicare benefit design

February 26, 2013

The House Ways and Means Health Subcommittee today held a hearing on proposals to update and improve the Medicare fee-for-service benefit structure. Glen Hackbarth, chairman of the Medicare Payment Advisory Commission, testified on MedPAC's June recommendation that Congress replace the current benefit design with one that includes an out-of-pocket maximum; deductibles for Part A and B services; copayments that may vary by type of service and provider; secretarial authority to alter or eliminate cost sharing based on the value of services; no change in beneficiaries' aggregate cost-sharing liability; and an additional charge on supplemental insurance. Witness Mark Fendrick, M.D., director of the University of Michigan Center for Value-Based Insurance Design, told the committee that benefit design should incorporate "clinical nuance," and Tricia Neuman, director of the Kaiser Family Foundation's Program on Medicare Policy, testified on the implications of possible changes for beneficiaries.