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Open-ended options in Medicare risk contracts with HMOs
J B Christianson1, B Dowd, R Feldman
1Institute for Health Services Research, University of Minnesota, Minneapolis, USA.
Managed Care Quarterly
|December 4, 1995
Summary
Health Maintenance Organizations (HMOs) could offer expanded managed care options to Medicare beneficiaries with open-ended products. However, successful implementation requires addressing key operational issues and changes in the Medicare supplementary insurance market.
Area of Science:
- Health Services Research
- Managed Care Policy
- Medicare Program Analysis
Background:
- The open-ended option is widely adopted within the Health Maintenance Organization (HMO) industry.
- Expanding managed care choices for Medicare beneficiaries is a key policy objective.
Purpose of the Study:
- To evaluate the potential for Health Maintenance Organizations (HMOs) to offer open-ended products under Medicare risk contracts.
- To identify critical factors influencing the adoption of open-ended products by HMOs serving Medicare beneficiaries.
Main Methods:
- Analysis of operational considerations for HMOs offering open-ended products.
- Review of potential impacts on Medicare beneficiaries and the supplementary insurance market.
Main Results:
- HMOs offering open-ended products to Medicare beneficiaries would increase managed care options.
- Key challenges include managing out-of-plan use, beneficiary education, PRO interfaces, provider payments, and medical screening.
- Significant changes in the Medicare supplementary insurance market are likely prerequisites for HMO adoption.
Conclusions:
- Permitting open-ended products could enhance Medicare managed care.
- HMOs require solutions for operational challenges and market adjustments before offering these plans.
- The supplementary insurance market's evolution is crucial for the success of open-ended Medicare plans.