MEDICARE+CHOICE: Dodd Steps In, More Pullbacks Announced
Sen. Christopher Dodd (D-CT) has called for a six-month moratorium on Medicare HMO pullouts in reaction to the spate of withdrawals following last week's decision by the Health Care Financing Administration not to allow a readjustment of rate structures. At a meeting of seniors advocates, counselors and politicians assembled by Dodd "to come up with a strategy for dealing with the panic" caused by Oxford Health Plans' "decision ... to drop more than 26,000 Medicare customers in four Northeastern states," he said he planned "to submit a moratorium bill this week." The measure would apply "retroactively to Oxford and other insurers who have recently announced plans to drop senior citizens." The AP/Hartford Courant reports that while a spokesperson for Oxford "refused to comment," American Association of Plans President Karen Ignagni said "Dodd's moratorium would not address the problem of low federal reimbursements." She added, "Essentially, what you have in many areas around the country now is the government payments don't cover the costs of treating Medicare beneficiaries and paying providers, doctors and hospitals" (10/6).
Several more Medicare HMO plans announced pullouts yesterday. Florida Hospital's Premier Care "is discontinuing its [HMO] that serves 14,000" seniors in the Orlando area. The plan "hadn't advertised for new members since firing its sales staff five months ago, but it was bound by federal law to sell policies to anyone who asked," the Orlando Sentinel reports. Humana Inc. and Aetna Health Plan of Florida Inc. have announced withdrawals in the area; Blue Cross Blue Shield of Florida Inc., Community Health Care Systems Inc. and Prudential Insurance Co. told the Sentinel that they plan to continue offering Medicare HMO service in Central Florida (Pack, 10/6).
WellCare of New York will not renew Medicare HMO contracts in four upstate New York counties -- Broome, Columbia, Delaware and Otsego -- effectively ending service Jan. 1, 1999. Approximately 4,200 of the plan's 10,300 members will be affected (Wellcare release, 10/6).
Industry Prognosis Uncertain
The New York Times reports that "unload[ing] 250,000 elderly Medicare customers" may not necessarily pull HMOs out of their "three-year earnings slump." The exodus of the past several weeks occurred in areas where reimbursement rates were low and HMOs "had a relatively small presence." Sanford Bernstein & Company's Kenneth Abramowitz notes that "HMO executives are 'livid' with anger" over HCFA's refusal to consider a rate readjustment, noting that the agency "required them to set their benefit package for 1999 last May and then announced regulations in June that will add to the cost of doing business." Abramowitz said, "It was a double cross." In addition, he noted that HCFA "regards HMOs as competitors: it's like asking the Post Office to set rates for Federal Express" (Freudenheim, 10/6).