Physician's Capitation Trends-Major fallout expected from managed Medicare
Physician's Capitation Trends-Major fallout expected from managed Medicare
Feds expect 99 plans to step back
Look for significant movement of Medicare patients next January when 99 Medicare+ Choice plans will reduce or abandon service areas. This is expected to affect nearly 250,000 Medicare patients, and nearly 80,000 managed Medicare clients may opt for traditional fee-for-service programs.
These latest moves are setting up a congressional free-for-all in the fall surrounding the need to postpone implementation of the Health Care Financing Administration's Medicare+Choice proposed risk adjuster, an idea House Ways & Means Health Subcommittee Chairman Rep. Bill Thomas (R-CA) seems to like.
On July 1, when M+C plans submitted adjusted community rate proposals for 2000, 41 plans withdrew from the Medicare program entirely, while 58 reduced their service areas. About 5% of the 6.2 million M+C enrollees were affected, HCFA estimates. Plans must notify beneficiaries of their options by Sept. 15. Withdrawals take effect Jan. 1, 2000.
While 33 states will experience managed Medicare reductions and withdrawals, Louisiana, Maryland, Virginia, and Florida are each expected to have over 10,000 seniors return to traditional Medicare, according to HCFA. States most affected by the M+C beneficiary changes are New York (39,000), Louisiana (34,000), Texas (32,000), Arizona (31,000), and Florida (29,000).
Medicare HMO spending won't increase much
The American Association of Health Plans (AAHP), an HMO lobbying group, says Medicare HMOs are pulling out of the program because they are not paid enough. Noting an analysis by PricewaterhouseCoopers, AAHP estimates that 46% of beneficiaries live in areas where Medicare+ Choice payments will increase by 2% or less after risk adjustment. Some 69% of beneficiaries live in areas where payments will increase by 4% or less. By contrast, Medicare fee-for-service spending is expected to grow by nearly 6% next year.
HCFA counters this criticism by pointing to a recent GAO report finding M+C reimbursement rates to be "more than adequate," while some plans may even be overpaid.
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