Medicare HMOs:

HCFA Could Promptly Reduce Excess Payments by Improving Accuracy of County Payment Rates

T-HEHS-97-82: Published: Feb 27, 1997. Publicly Released: Feb 27, 1997.

Additional Materials:

Contact:

William J. Scanlon
(202) 512-7114
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

GAO discussed the rates Medicare pays health maintenance organizations (HMO) in its risk contract program, focusing on: (1) the Health Care Financing Administration's (HCFA) method for setting HMO rates; and (2) GAO's proposed modification of HCFA's HMO rate-setting method.

GAO noted that: (1) HCFA's current method of determining the county rate produces excess payments; (2) because HCFA's method excludes HMO enrollees' costs from estimates of the per-beneficiary average cost, it bases county payment rates on the average per-beneficiary cost of only those beneficiaries that remain in the fee-for-service sector and ignores the costs HMO enrollees would have incurred if they had remained in fee-for-service; (3) research has shown the costs of those remaining in fee-for-service to be higher on average than the likely costs of HMO enrollees; (4) a difficulty in correcting the problem is that HCFA cannot directly observe the costs HMO enrollees would have incurred if they had remained in the fee-for-service sector; (5) GAO's proposed modification is designed to fix that problem; (6) GAO developed a way to estimate HMO enrollees' expected fee-for-service costs using information available to HCFA; and (7) GAO's approach produces a county rate that represents the costs of all Medicare beneficiaries and could result in hundreds of millions of dollars in savings to Medicare.

Oct 18, 2017

Oct 4, 2017

Oct 3, 2017

Sep 29, 2017

Sep 13, 2017

Sep 12, 2017

Sep 8, 2017

Sep 7, 2017

Looking for more? Browse all our products here