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Disenrollment from Medicare HMOs.

K T Call¹, B E Dowd, R Feldman

¹Division of Health Services Research and Policy, School of Public Health, University of Minnesota, Box 729 Mayo, 420 Delaware Street SE, Minneapolis, MN 55455, USA. callx001@tc.umn.edu

The American Journal of Managed Care

|February 24, 2001

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Medicare beneficiaries leaving health maintenance organizations (HMOs) did not have higher overall costs than those staying in fee-for-service (FFS) Medicare. Disenrollees had increased Part A spending and higher procedure rates, especially in high-HMO markets.

Area of Science:

Health Services Research
Medicare Policy
Healthcare Economics

Background:

Medicare Health Maintenance Organizations (HMOs) enrollment and disenrollment have been studied to understand cost implications.
Determining if beneficiaries leaving Medicare HMOs are more or less costly than those in fee-for-service (FFS) Medicare is of significant interest.

Purpose of the Study:

To investigate disenrollment bias in Medicare HMOs, specifically if high-cost beneficiaries leave.
To analyze how disenrollment bias varies with Medicare HMO market characteristics.
To compare surgical procedure rates and hospitalizations for ambulatory care-sensitive conditions between HMO disenrollees and continuing FFS beneficiaries.

Main Methods:

Cross-sectional analysis of 1994 Medicare data.

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Sampled Medicare beneficiaries from 124 counties with substantial HMO enrollment.

Compared expenditures and inpatient service use for HMO disenrollees and FFS beneficiaries (with pseudodisenrollment) over 6 months.

Main Results:

HMO disenrollees showed higher Part A expenditures but similar total and Part B expenditures compared to FFS beneficiaries in the 6 months post-disenrollment.
Beneficiaries with spending among disenrollees had higher total and Part B expenditures.
Disparity in spending between disenrollees and FFS beneficiaries increased with HMO market penetration.
HMO disenrollees underwent more surgical procedures and had higher hospitalization rates for ambulatory care-sensitive conditions.

Conclusions:

Medicare HMOs exhibited favorable disenrollment patterns relative to continuing FFS beneficiaries in 1994.
This favorable disenrollment trend for HMOs intensified with increasing HMO market share.