MEDICARE HMOs: More Plans Pull Out Of Markets
The Florida Times-Union reports that 50,000 Floridians will be searching for new Medicare HMOs following the recent announcements of Principal Health Care of Florida, Prudential HealthCare and AvMed Health Plan that they will drop their plans. Principal officials said Tuesday that they would scale back Medicare HMO business in Duval, Nassau and St. Johns counties, less than a month after Prudential pared its plan in Baker and St. John's counties and just days after AvMed revealed it would leave Baker, Clay, Nassau and St. Johns counties. The recent announcements prompted Insurance Commissioner Bill Nelson (D) and Florida Attorney General Bob Butterworth (D) to issue subpeonas to determine whether "unfair trade practices or anti-trust laws have been broken by the" recent withdrawals. Heidi Garwood of the Florida Association of HMOs continued to blame the government for the health plans' decisions, noting that the HMOs "need to recoup the expenses they are incurring. ... You can't ask any business to give something for free." Steve Gormley of Principal expressed optimism for the programs' recovery in Florida, saying, "Hopefully, when the dust settles, the seniors who are out there will wind up with a viable program. Hopefully, government and business can come to a working relationship that can benefit Medicare beneficiaries" (Bryant-Friedland, 10/15).
Adding To The List
Citing similar concerns, PacifiCare of Arizona and HealthPartners Health Plans are folding their Medicare HMOs in four rural Arizona counties each, affecting a total of 7,000 seniors. PacifiCare vice president Ted Ryan said the lack of competition in the rural market "hinder[s] ... health plans' ability to contract with physicians." He said that low reimbursement levels, coupled with high costs, provide a hostile environment for Medicare HMOs. He explained, "When you combine all of those things, what you've got is a pretty uncompetitive, unfriendly environment for managed care." Only "a sprinkling of HMOs" remain in the region to cover seniors, including Premier Healthcare of Arizona, which plans to stay in the market despite its difficulties. Premier CEO Dr. Gerald Marshall said, "Definitely we have plans to stay and to expand. But it's labor-intensive work. We need to work very closely with physicians, hospitals and members in those communities to make it work" (Gonzales, Phoenix Business Journal, 10/12).
In Ohio Too
"Financial losses are so high at some health care providers that Central Ohio will have fewer Medicare HMOs come January," Business First of Columbus reports. Ohio Health Alliance, a joint venture of Ohio State University Medical Center and OhioHealth, announced it will leave the Medicare market by the end of the year, affecting 7,100 enrollees in five counties. "In reviewing our trends it became very apparent there was no light at the end of the tunnel," said Chuck Koch, senior vice president of OhioHealth (May, 10/12). "We were really trying to look at options to make it work, but there just were not enough options to close the gap with the losses," he said (Gebolys, Columbus Dispatch, 10/10). Koch criticized the government's reimbursement system, charging it "penalizes certain geographic areas for providing low-cost health care while rewarding areas with high-cost health care services." Another provider in rural Ohio counties, Community Health Plan of Ohio, will exit the Medicare market in five counties, said CEO Dr. Richard Kamps. He said, "The rural hospitals that pulled out of the Medicare HMO program realized they could get paid more for services from traditional fee-for-service Medicare plans" (Business First, 10/12).
Reversal Of The Trend
Despite United HealthCare Corp.'s recent announcement that it will withdraw its Medicare HMO product from 86 of the 206 counties where it offers the plan, the company revealed it "is bringing the first Medicare HMO to Memphis this week," in an attempt to enroll 5,000 area Medicare enrollees (Roman, Memphis Business Journal, 10/12).
Change Needed ASAP
Two recent editorials urge the Clinton administration to reconsider its rejection of the managed care industry's request that health plans be allowed to adjust their 1999 Medicare rate proposals. The Denver Post concluded: "HCFA regulators should reconsider the agency's prior decisions quickly and provide reasonable ways for the individual insurers to adjust their rating proposals so that existing and planned programs may continue. Failure to do so will result in unnecessary disruption in the coverage for millions of Medicare recipients" (10/15).
Modern Healthcare: "By the looks of it, the fledgling Medicare+Choice program is on shaky ground. More than 400,000 seniors are enrolled in HMOs that intend to pull out of the market. If the government is to come anywhere near its managed-care enrollment goals, the program must be tweaked (10/12 issue). Click Medicare HMO to read past AHL coverage of this issue.