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How to obtain a Medicare risk contract
1Birch & Davis Health Management Corporation, Silver Spring, MD, USA.
Insights
Health maintenance organizations (HMOs) are increasingly enrolling Medicare beneficiaries. Proposed legislation aims to expand Medicare contracting opportunities for diverse health plans, potentially increasing HMO participation.
Area of Science:
- Health Policy
- Healthcare Management
- Medicare Program
Background:
- Approximately 3.6 million Medicare beneficiaries, representing 10% of the total Medicare population, are enrolled in health maintenance organizations (HMOs).
- Medicare beneficiary distribution among HMOs is uneven, with a significant concentration in California.
Purpose of the Study:
- To analyze the current landscape of HMO enrollment in Medicare.
- To identify factors driving the increasing involvement of HMOs in the Medicare program.
- To examine the potential impact of proposed legislation on Medicare contracting.
Main Methods:
- Analysis of Medicare beneficiary enrollment data in HMOs.
- Review of industry trends and commitments regarding Medicare market penetration.
- Assessment of proposed legislative changes to Medicare payment formulas and regulatory requirements.
Main Results:
- HMOs are steadily increasing their presence in the Medicare market.
- Four California-based HMOs enroll nearly 30% of all Medicare beneficiaries in HMOs.
- Proposed legislation could broaden eligibility for Medicare contracts to a wider range of health plans.
Conclusions:
- The trend of increasing HMO involvement in Medicare is likely to continue.
- Legislative changes are anticipated to facilitate broader participation of health plans in Medicare.
- Recommendations are provided to streamline the application and approval process for HMOs seeking Medicare contracts.
Abstract:
About 3.6 million Medicare beneficiaries--10 percent of the Medicare population--receive Part A and Part B benefits through health maintenance organizations (HMOs). Beneficiaries are spread unevenly among one-third of the nation's 575 HMOs, with four California HMOs accounting for almost 30 percent of all Medicare enrollees. HMO involvement in Medicare has increased steadily since 1993 and may continue to do so over the next few years for two main reasons. First, the HMO industry is committed to increasing its penetration of the Medicare market. Second, enactment of legislation now before Congress would modify payment formulas and regulatory requirements that prevent many HMOs from applying for Medicare contracts. Enactment also would permit a wider array of health plans to contract with Medicare. HMOs must meet Federal requirements and undergo a contracting process to obtain Medicare risk contracts. Proposed Federal legislation suggests tht most of the existing requirements will apply to the revised and expanded Medicare contracting opportunities. The accompanying recommendations should help HMOs expedite the application and approval process.