PPOs limit choice of nursing homes, cost Medicare more, investigators say

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Some private health plans limited Medicare patients' choice of nursing homes and other healthcare providers, according to a study released Monday by the Government Accountability Office.

Researchers said that the government had "exceeded its authority" by only paying for services from preferred provider organizations (PPOs) designated by the plans, the New York Times reported.

The study found also that the PPOs did not save the federal government money and increased out-of-pocket costs for the elderly.

Medicare spent $650 to $750 more per year on beneficiaries enrolled in PPOs than beneficiaries in traditional Medicare, investigators said.

The federal Centers for Medicare and Medicaid Services will comply with the recommendations suggested by the report, which included private plans to cover all plan services from any provider, said administrator Dr. Mark B. McClellan.

PPOs are the preferred type of health insurance among beneficiaries 65 and younger.