Medicare HMOs Net Higher Reimbursement Rates for 2001
Medicare HMOs will receive higher rates than previously planned due to recent legislation aimed at "entic[ing]" plans that have pulled out of the program to rejoin, Reuters Health reports. The increases were part of the Medicare and Medicaid "giveback" package, and will raise reimbursement rates for Medicare HMOs by 3%, rather than the previously planned 2% increase. Although plands had to notify HCFA last July regarding their participation in 2001, HCFA has given plans a chance to rejoin the program at the higher payment rate which takes effect March 1. Notification is needed by Jan. 18. "We look at this as a step in a long term rescue mission for the Medicare+Choice program," American Association of Health Plans spokesperson Susan Pisano said. "[I]ntense" lobbying by the HMO industry played a big role in securing the increased reimbursements, which were designed to especially aid plans operating in "rural or smaller metropolitan markets," Reuters Health reports. HMOs are also limited in how they may use the funds; most are expected to use them to reduce beneficiary premiums or cost-sharing arrangements, increase provider payments or improve benefits. On Jan. 1, nearly 120 HMOs either pulled out of the Medicare+Choice program or reduced their service areas, resulting in 934,000 beneficiaries having to enroll in another plan or return to fee-for-service (Reuters Health, 1/5).
In related Medicare HMO news, HealthMetrix Research Inc., an independent managed care research firm, released its list of the Medicare HMOs that offer the "best value" in the nation. Rankings were based mostly on "cost-effectiveness" factors, such as their prescription drug benefit plans and their monthly premiums. The plans were not ranked on quality of care, health outcomes or member satisfaction measures. "Typically, plans that are ranked at or near the top ... are going to have a good balance between a pretty good prescription drug benefit and fairly low monthly premiums for their members," HealthMetrix President Alan Mittermaier said. He added, "This award responds to the continued concerns and uncertainties that seniors have with out-of-pocket costs incurred when they enroll in a Medicare HMO." Enrollees in many of the top plans tended to pay about half as much in out-of-pocket costs as those enrolled in the "average" HMO. Cost comparisons were calculated for the "typical healthy person," individuals in "fair" health, and those in "poor" health (Reuters Health, 1/5). To view the rankings, go to http://www.hmos4seniors.com/hmoaward.htm.
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