Congress may try to stop Medicare HMO exodus
Congress may try to stop Medicare HMO exodus
Senator introduced bill in last session
Congress has taken an interest in stopping managed care organizations (MCOs) from terminating their contracts to provide Medicare plans under the Medicare+Choice program.
More than 40 Medicare risk plans have decided not to renew their Medicare contracts in 1999, and another 50-plus plans chose to reduce their service areas. This has affected more than 410,000 beneficiaries nationwide.
Roseland, NJ-based Prudential Healthcare, Oxford Health Plans of Norwalk, CT, and Foundation Health Systems of Woodland Hills, CA, are among the HMOs that ceased Medicare operations as of Dec. 31, 1998.
Senator William V. Roth Jr. (R-DE) may reintroduce legislation to prevent more than 40 MCOs from terminating Medicare contracts.
Roth made a last-ditch effort in October to stem the flow of MCOs out of Medicare risk sharing, but his bill came too late in the session and was lost in the fray of budget bills and election preparation.
"The issue arose very late in the Congress, and frankly, we just ran out of time," says Brian Tassinari, Roth’s spokesman. "We’re definitely going to be looking again at the issue in the 106th Congress."
Tassinari says Roth may introduce the same bill, which was co-sponsored by Sens. Joe Lieberman (D-CT) and Connie Mack (R-FL). The bill essentially would do the following:
• require the Baltimore-based Healthcare Financing Administration (HCFA) to reconsider the premium and cost-sharing packages of health plans that have terminated their Medicare contracts in 1998;
• change the date by which a Medicare+Choice organization must submit information on proposed premiums, costs, and benefits to HCFA from May 1 to July 15;
• change the date by which a Medicare+Choice organization must notify HCFA that it intends to terminate a contract for the following year from May 1 to July 15.
Roth says in a news statement that legislation is needed to instruct HCFA to allow plans to restructure their costs where justified, because HCFA decided not to allow Medicare+Choice plans to update their cost and benefit filings for 1999.
"This would give many of the health insurance providers the flexibility they need to go back into these markets," Roth says.
A spokesman for the American Association of Retired Persons (AARP) in Washington, DC, says HCFA is not entirely to blame for the problem.
"What we’re seeing here is an insurance company reaction to what’s going on," says Greg Marchildon, AARP spokesman. "They want everyone to believe it is all about reimbursement rates, when there’s not any really compelling evidence that that’s the case."
Marchildon says HMOs are pulling out of Medicare markets for a variety of reasons, including increased competition in saturated markets.
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