MEDICARE HMOs: Have High Disenrollment Rate, GAO Finds

      Two recently released government reports found that "[o]ne out of every five Medicare HMOs had disenrollment rates above 20% in 1996, with most of the beneficiaries leaving because they had trouble getting services," Modern Healthcare reports (Weissenstein, 5/11 issue). One report, conducted by the General Accounting Office, analyzed enrollee data from 194 Medicare HMOs for 1996, finding that more than 40 of the plans "had annual disenrollment rates of more than 20%," compared to 32 plans that "had disenrollment rates of under 5%" (Health Legislation, 5/13 issue). The GAO found that "HMOs in operation for less than two years tended to have higher annual disenrollment rates than older plans," suggesting that "older plans" may have "learned through experience how to better satisfy their Medicare members." However, the GAO found, "[i]n markets served by at least two plans, more than one-third of disenrollees switched to fee-for-service." The report noted that disenrollment rates varied widely across the nation, going on to speculate that "disenrollment rates may tend to be high in areas where competition is strong or where many beneficiaries are unaccustomed to managed care" (4/98).

Problems?
      The second report, released by the Health and Human Services Inspector General's office, "found seniors who left HMOs generally reported more problems accessing care." Based on a survey of 3,000 beneficiaries, the HHS report found that "15% of those who disenrolled ... 'didn't get quick appointments when they were very ill,' compared with only 4% of seniors who stayed in an HMO." The inspector general's report "also found that 18% of all beneficiaries surveyed had been screened for health status when they applied to the HMO ... a significant reduction from the last beneficiary survey, completed in 1993, when 43% of seniors said they had been screened" (Modern Healthcare, 5/11 issue).

Consumer Information
      A third report, released May 6 by the GAO, concludes that "lack of standards for benefit descriptions in plans' contract submissions hinders HCFA's efforts to produce benefit comparison charts and complicates the agency's reviews of plans' marketing materials." This lack of uniform standards needs to be addressed, the report notes, since last year's Balanced Budget Act "mandate[d] that HCFA provide beneficiaries with comparative information about" new health plan options available through the Medicare+Choice program. While HCFA "is working to produce information to help beneficiaries compare their health plan options," the GAO suggests that "the agency could leverage its resources by setting information standards, especially for plans' marketing materials." The report also notes that HCFA is already collecting data on Medicare HMO disenrollment rates that this data could be published for beneficiaries' use. Further, the GAO states that HCFA "is planning to survey ... disenrollees in the future," information the report notes "could help explain why some HMOs have high disenrollment rates." However, no "survey instrument or methodology has been developed," and "according to HCFA staff, the results will not be available until 2000 at the earliest" (5/6).

The Numbers
      The GAO report on disenrollment rates notes that the "number of Medicare risk HMOs increased from 154 to 307" between December 1994 to December 1997, with total enrollment climbing from 2.3 million to 5.2 million over the period. Medicare HMO enrollment "is expected to continue, fueled in part by the [Balanced Budget Act], which provided for new types of Medicare managed care plans and increased plan payments in many areas that previously lacked a fee-for-service alternative (4/98). Both GAO reports are available online in pdf format. Click here for "Medicare: Many HMOs Experience High Rates of Beneficiary Disenrollment," or click here for "Medicare Managed Care: Information Standards Would Help Beneficiaries Make More Informed Health Plan Choices."