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Title
Using prior utilization to determine payments for Medicare enrollees in health maintenance organizations.
First Author
Beebe, James C
Date of Pub
1985 Spring
Pages
27-38
Volume
6
Issue
3
Other Authors
Eggers, Paul W; Lubitz, James
Abstract
The Tax Equity and Fiscal Responsibility Act of 1982 is expected to make it more attractive for health maintenance organizations (HMO's) to participate in the Medicare program on an at-risk basis. Currently, payments to at-risk HMO's are based on a formula known as the adjusted average per capita cost (AAPCC). This article describes the current formula and discusses a modification, based on prior use of Medicare services, that endeavors to more accurately predict risk. Using statistical simulations, formulas incorporating prior use performed better for some types of biased groups than a formula similar to the one currently employed. Major concerns involve the ability to "game the system." The prior-use model is now being tested in an HMO demonstration. This article also outlines the limitations of a prior-use model and areas for future research.
Abstract Continued
N/A
MeSH
Forecasting/methods : Health Maintenance Organizations/economics : Medicare/utilization : Models, Theoretical : Rate Setting and Review/methods : Regression Analysis : Reimbursement Mechanisms : Tax Equity and Fiscal Responsibility Act : United States
NTIS Number
PB85-226165