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WASHINGTON (AP) - The government began paying more money Thursday to private health plans that serve Medicare patients, with the prospect of a further increase in 2002.
The higher reimbursement for health maintenance organizations is intended to help keep HMOs in the federal insurance program for the elderly and disabled, and attract new participants.
``This is a positive step but more needs to be done,'' said Phil Blando, spokesman for the American Association of Health Plans, which represents HMOs.
About 250 HMOs supplement Medicare's traditional health coverage in some way, but 179 are regular providers. Nearly 6 million of the overall 39 million Medicare participants pay for expanded benefits that include assistance in buying prescription drugs.
As of Jan, 2001, 1.6 million people have been affected by HMOs leaving the Medicare program, said the American Association of Health Plans, which represents HMOs. There are no estimates for this year.
To retain or attract private health plans, lawmakers have raised government payments to HMOs, many of which have passed them on to doctors and hospitals. Health advocates and some government officials have criticized this approach, saying that HMOs are leaving Medicare for reasons other than money.
The higher rates that took effect Thursday reflect a roughly 5 percent increase, depending on complex formulas that take into account where an HMO is and how many and what type of patients they serve, according to the Health Care Financing Administration, which runs Medicare. In 2002, the increase of the basic rate and other payments for varied service will give most HMOs an additional 5.3 percent increase.
The raise comes as Congress considers changes to Medicare, including granting all participants in the 36-year-old program help with medicines needed after a hospital stay.
Also, a recent report by the Medicare Payment Advisory Commission, which Congress created in 1997 to examine the system, concluded that HMOs are getting much more money than nonmanaged care hospitals and doctors.
Lawmakers wanted to give older Americans more health coverage choices by raising payments to private insurers. But the advisory panel told Congress that it found no evidence that more money retains private insurers.
Blando said it was too soon to tell whether more plans would leave Medicare despite the rising payments.
Some insurers have said they will lower fees for coverage because of the new rates. For example, Partners Health Plans of North Carolina will cut its monthly premium to $25 from $50, affecting 25,000 participants.
When an HMO leaves, Medicare beneficiaries who were enrolled do not lose health insurance coverage. But they must find another HMO, which may mean having to switch doctors or else return to submitting medical bills directly to Medicare, losing the extra benefits many HMOs offer.
On the Net:
Health Care Financing Administration:
http://hcfa.hhs.gov/medicare/mcarcnsm.htm
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