Pre-enrollment reimbursement patterns of Medicare beneficiaries enrolled in "at-risk" HMOs.
Eggers, Paul W
Date of Pub
The Health Care Financing Administration (HCFA) has initiated several demonstration projects to encourage HMOs to participate
in the Medicare program under a risk mechanism. These demonstrations are designed to test innovative marketing techniques,
benefit packages, and reimbursement levels. HCFA's current method for prospective payments to HMOs is based on the Adjusted
Average Per Capita Cost (AAPCC). An important issue in prospective reimbursement is the extent to which the AAPCC adequately
reflects the risk factors which arise out of the selection process of Medicare beneficiaries into HMOs. This study examines
the pre-enrollment reimbursement experience of Medicare beneficiaries who enrolled in the demonstration HMOs to determine
whether or not a non-random selection process took place. The results of this study suggest that the AAPCC may not be an adequate
mechanism for setting prospective reimbursement rates. The Marshfield results further suggest that the type of HMO may have
an influence on the selection process among Medicare beneficiaries. If Medicare beneficiaries do not have to change providers
to join an HMO, as in an IPA model or a staff model which includes most of the providers in an area, the selection process
may be more likely to result in an unbiased risk group.
Costs and Cost Analysis : Health Maintenance Organizations/economics : Massachusetts : Medicare/utilization : Oregon : Pilot
Projects : Prospective Payment System/methods : Reimbursement Mechanisms/methods : Risk : Wisconsin