CMS to Target Social HMO Program for ‘Phaseout’
The Centers for Medicare and Medicaid Services (formerly HCFA) wants to "phase out" the 17-year-old "social HMO" program when it comes up for renewal in two years, the Chicago Tribune reports. Started in 1984, the program provides seniors with social services not covered by traditional Medicare, such as prescription drugs, transportation to physician visits and help with shopping and cooking, in an effort to reduce government spending on nursing home care. The program is run through four sites -- Long Beach, Calif.-based Senior Care Action Network, Las Vegas-based Health Plan of Nevada, New York City's Elderplan and Kaiser Permanente Senior Advantage II in Portland, Ore. -- and primarily targets seniors who are "not poor enough to receive Medicaid benefits" for nursing home care, "yet not wealthy enough" to pay for such care themselves. The Tribune reports that social HMO participants save an average of $5,000 per year, adding that the program's membership has grown tenfold and its budget twentyfold since 1984. Without the program, the Tribune reports, many participants would "face the prospect of depleting their assets" in order to qualify for Medicaid, as Medicare does not cover nursing home costs.
The social HMO program is set to expire in two years, and "Congress has been urged to let it die quietly," the Tribune reports. According to a study conducted for CMS by New Jersey-based Mathematica Policy Research Center, Medicare payments for "frail" elderly patients are 2.5 times higher for social HMOs than they are for other Medicare HMOs, although social HMOs receive less money than other health plans for "healthier" patients. "The government is spending way more than they need to for the benefit they're getting," Mathematica senior fellow Randy Brown said. But social HMO officials "argue that the study was flawed because it didn't investigate the fundamental question" of whether social HMOs reduce costs by keeping seniors out of nursing homes, which can cost more than $40,000 per patient per year. Their own studies, officials say, show that social HMO members are 53% less likely to need nursing home care than other seniors. Backed by advocates for the elderly and "even the nursing home industry," social HMO officials say Congress should renew the program "and phase in up to five more sites a year," noting that Census Bureau projections that the over-65 population will double to 69 million by 2030 make the expansion "particularly important" (Haynes, Chicago Tribune, 8/3).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.