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Related Experiment Videos

Protecting payment levels under Medicare risk-based contracting.

T H Brock1

  • 1Proskauer Rose LLP, Washington, DC, USA.

Healthcare Financial Management : Journal of the Healthcare Financial Management Association
|September 4, 1997
PubMed
Summary

Medicare beneficiaries in risk-based Health Maintenance Organizations (HMOs) are increasing. To avoid underpayment, HMOs must monitor Medicare payments and challenge inadequate rates due to potential calculation errors by HCFA.

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Area of Science:

  • Healthcare Policy
  • Health Economics

Background:

  • Over 3.4 million Medicare beneficiaries are enrolled in risk-based Health Maintenance Organizations (HMOs).
  • Enrollment in these plans is projected to double within seven years.
  • The Balanced Budget Act of 1997 expanded Medicare contracting to include various plan types.

Purpose of the Study:

  • To highlight potential underpayment issues faced by HMOs contracting with Medicare.
  • To inform risk-based HMOs about monitoring and challenging Medicare payment determinations.

Main Methods:

  • Analysis of Medicare payment calculation requirements under risk-based contracts.
  • Identification of common errors in Health Care Financing Administration (HCFA) payment determinations.

Main Results:

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  • HCFA payment calculations may not accurately reflect the adjusted average per capita cost.
  • Errors often arise from using enrollee mailing addresses instead of service area data.
  • This discrepancy can lead to underpayment for services provided by HMOs.

Conclusions:

  • Risk-based HMOs are susceptible to underpayment from inaccurate Medicare payment calculations.
  • Proactive monitoring and challenging of inadequate payment rates by HMOs are crucial.
  • Ensuring accurate geographic data in payment calculations is essential for fair reimbursement.