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High ideals & perverse consequences: risk adjustments, encounter data & Medicare+Choice.

B M Fried1, P Freeman

  • 1Shaw Pittman Potts and Trowbridge, Washington, DC, USA.

Integrated Healthcare Report
|July 6, 1998
PubMed
Summary

Developing a Provider Sponsored Organization (PSO) involves significant risks. This article explores the complexities of government administration and risk adjustment for Medicare payments to PSOs and HMOs.

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Area of Science:

  • Health Policy
  • Healthcare Administration
  • Health Economics

Background:

  • Provider Sponsored Organizations (PSOs) face inherent risks and complications in their development.
  • The Centers for Medicare & Medicaid Services (CMS), formerly HCFA, administers programs impacting these organizations.
  • Trust in government program administration is a significant concern for healthcare organizations.

Purpose of the Study:

  • To examine the complexities and uncertainties surrounding the development and administration of PSOs.
  • To provide insight into the government's perspective on risk-adjusting Medicare payments for PSOs and HMOs.
  • To assess the potential risks and rewards for health systems engaging with government healthcare programs.

Main Methods:

  • Analysis of government program administration capabilities.

Related Experiment Videos

  • Exploration of risk-adjustment methodologies for Medicare payments.
  • Qualitative assessment of organizational trust in government healthcare initiatives.
  • Main Results:

    • Developing PSOs presents multifaceted risks beyond organizational capabilities, including governmental administrative capacity.
    • Governmental trust and program follow-through are critical, yet often uncertain, factors for PSOs and HMOs.
    • Risk-adjustment mechanisms aim to increase payments for providers caring for sicker senior populations.

    Conclusions:

    • The decision to develop a PSO requires a thorough understanding of governmental program administration and risk.
    • Uncertainty in government execution and trust significantly impacts PSO viability.
    • Risk-adjusted Medicare payments offer potential financial benefits for managing high-need patient populations.