Medicare: HCFA Should Release Data to Aid Consumers, Prompt Better HMO
Performance (Chapter Report, 10/22/96, GAO/HEHS-97-23).
Until recent years, nearly all Medicare beneficiaries received care
through a fee-for-service arrangement, with benefits and cost-sharing
provisions standardized nationwide. Today, however, nearly 4 million
beneficiaries have opted for health maintenance organizations (HMO),
Medicare's leading managed care alternative. Although HMOs must cover
the benefits available under traditional fee-for-service Medicare, they
differ from one another in the provision of additional benefits,
required premiums, provider networks, and ability to satisfy members. As
a result, beneficiaries need reliable information to pick the plan that
is right for them. Some beneficiaries do not understand even the basic
difference between traditional Medicare and HMOs and may confuse HMOs
with supplemental "Medigap" insurance. Moreover, some HMO sales agents
have misled or used other questionable marketing practices to enroll
poorly informed beneficiaries. This report reviews (1) the performance
of the Health Care Financing Administration (HCFA), which administers
Medicare, in providing beneficiaries with enough information on Medicare
HMOs and (2) the usefulness of readily available HCFA data to caution
beneficiaries about poorly performing HMOs.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: HEHS-97-23
TITLE: Medicare: HCFA Should Release Data to Aid Consumers, Prompt
Better HMO Performance
DATE: 10/22/96
SUBJECT: Information dissemination operations
Health maintenance organizations
Managed health care
Health care programs
Consumer education
Insurance premiums
Marketing
Health services administration
Sales promotion
IDENTIFIER: Medicare Health Care Prepayment Plan
NCQA Health Plan Employer Data and Information Set
Medicare Program
Federal Employees Health Benefits Program
HCFA Beneficiary Inquiry Tracking System
Medicare Risk Contract Program
Medigap
Miami (FL)
Los Angeles (CA)
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Cover
================================================================ COVER
Report to Congressional Requesters
October 1996
MEDICARE - HCFA SHOULD RELEASE
DATA TO AID CONSUMERS, PROMPT
BETTER HMO PERFORMANCE
GAO/HEHS-97-23
Medicare Should Release Data on HMOs
(101381)
Abbreviations
=============================================================== ABBREV
CalPERS - California Public Employees' Retirement System
DDST - Data Development and Support Team
FAcct - Foundation for Accountability
FAcct - Foundation for Accountability
HCFA - Health Care Financing Administration
HCPP - Health Care Prepayment Plan
HEDIS - Health Plan Employer Data and Information Set
HEDIS 2.5 - Health Plan Employer Data and Information Set 2.5
HHS - Department of Health and Human Services
HIP - HIP Health Plan of Florida
HMO - health maintenance organization
ICA - Information, Counseling, and Assistance Program
NCQA - National Committee on Quality Assurance
OIG - Office of Inspector General
PCA - PCA Health Plan of Florida
POS - point of service
PRO - Test
MWD - Test
Letter
=============================================================== LETTER
B-270167
October 22, 1996
The Honorable William S. Cohen
Chairman
The Honorable David H. Pryor
Ranking Minority Member
Special Committee on Aging
United States Senate
The Honorable Charles E. Grassley
The Honorable John B. Breaux
The Honorable Russell D. Feingold
The Honorable Ron Wyden
United States Senate
This report responds to your request that we review issues in
marketing and enrollment for health maintenance organizations (HMO)
serving Medicare beneficiaries and information that could be made
available to assist beneficiaries in choosing an HMO. This report
contains recommendations to the Secretary of Health and Human
Services that would make more information about HMOs available to the
public.
As arranged with your office, unless you publicly announce the
contents of this report earlier, we plan no further distribution of
this report until 30 days from the date of this letter. At that
time, we will send copies of this report to appropriate congressional
committees, the Secretary of Health and Human Services, and other
interested parties. If you have any questions about this report,
please call me at (202) 512-7114. Other major contributors are
listed in appendix IV.
William J. Scanlon
Director, Health Financing and
Systems Issues
EXECUTIVE SUMMARY
============================================================ Chapter 0
PURPOSE
---------------------------------------------------------- Chapter 0:1
In previous years, the need for useful, comparative information on
health maintenance organizations (HMO) serving Medicare beneficiaries
was not a front-burner issue. Nearly all beneficiaries received care
through a fee-for-service arrangement with benefits and cost-sharing
provisions standardized nationwide. Today, however, almost 4 million
beneficiaries have opted for HMOs, Medicare's predominant managed
care alternative. Although HMOs must cover the benefits available
under traditional fee-for-service Medicare, they differ from one
another in the provision of additional benefits, required premiums,
networks of providers, and ability to satisfy members. Because of
these differences, beneficiaries need information to pick the plan
right for them.
Some beneficiaries do not understand even the basic differences
between traditional Medicare and HMOs and may confuse HMOs with
supplemental "Medigap" insurance. Moreover, some HMO sales agents
have misled or used other questionable marketing practices to enroll
poorly informed beneficiaries.
For these reasons, Senator Pryor, the Ranking Minority Member of the
Senate Special Committee on Aging--joined by Senator Cohen, Chairman,
and by Senators Grassley, Breaux, Feingold, and Wyden--asked GAO to
examine issues related to the marketing, education, and enrollment
practices of health plans participating in the Medicare risk-contract
HMO program. In this report, GAO reviews (1) the performance of the
Health Care Financing Administration (HCFA), which administers the
Medicare program, in providing beneficiaries sufficient information
about Medicare HMOs and (2) the usefulness of readily available HCFA
data to caution beneficiaries about poorly performing HMOs.
BACKGROUND
---------------------------------------------------------- Chapter 0:2
Of the more than 4 million beneficiaries enrolled in Medicare managed
care, 90 percent are in "risk-contract" HMOs.\1 Medicare pays these
HMOs a fixed, per beneficiary fee, regardless of what the HMO spends
for each enrollee's health care. These HMOs are called "risk" HMOs
because the HMO assumes the financial risk of providing care for the
amount Medicare pays.
Compared with traditional fee-for-service Medicare, risk HMOs
typically cover additional benefits, cost beneficiaries less money,
and offer freedom from complicated billing statements. Risk HMOs are
required to cover all Medicare benefits, but many also provide
additional services--such as outpatient prescription drugs, routine
physical exams, hearing aids, and eyeglasses--that are not covered
under traditional Medicare. Although some HMOs charge a monthly
premium, others do not. In all cases, however, beneficiaries must
continue to pay a premium to Medicare--currently $42.50 per
month--and any specified HMO copayments. In return for the
additional benefits HMOs furnish, beneficiaries give up their freedom
to choose any provider. If a beneficiary enrolled in an HMO seeks
nonemergency care from providers other than those designated by the
HMO, or seeks care without following the HMO's referral policy, the
beneficiary is liable for the full cost of that care.
Although some sections of the country--primarily rural areas--have no
Medicare HMOs, other sections are served by several. More than 50
percent of all Medicare beneficiaries can choose from among at least
two HMOs. In some locations, beneficiaries can choose from among as
many as 14 different HMOs. Because a single HMO may offer multiple
products, each with its own combination of covered benefits and
premium levels, the number of choices often exceeds the number of
available HMOs.
--------------------
\1 Approximately 500,000 beneficiaries are enrolled in HMOs that are
reimbursed by HCFA on a cost basis or in another form of managed
care. See footnote 5 in ch. 1 for more details.
RESULTS IN BRIEF
---------------------------------------------------------- Chapter 0:3
HCFA does not provide beneficiaries any of the comparative consumer
guides that the federal government and many employer-based health
insurance programs routinely distribute to their employees and
retirees. For example, California's large public employee retirement
system provides its members summary charts comparing the benefit
packages and premium rates of available area plans. Medicare
beneficiaries seeking similar information face a laborious,
do-it-yourself process, including (1) calling a toll-free telephone
number and requesting the names and phone numbers of the HMOs serving
their area; (2) calling each of the HMOs to request marketing
materials; and (3) poring over a stack of brochures, each formatted
differently and in terminology that is not standardized, to compare
the competing plans.
HCFA amasses volumes of information that could be packaged and
distributed to help consumers choose among competing Medicare HMOs.
For example, HCFA compiles, for its internal use, information on
plans' premium requirements and benefit offerings that could be used
to construct HMO benefit comparison charts. HCFA also compiles the
data needed to calculate HMO disenrollment rates--an indicator of
beneficiary satisfaction. HCFA could publish, from other data it
routinely collects for oversight purposes, rates of enrollees'
complaints and the results of certification visits to HMOs.
HCFA is developing comparison charts that will contain information on
benefits and costs for all Medicare HMOs. HCFA does not plan to
distribute these charts to beneficiaries but will post them in an
electronic format on the Internet. HCFA expects the primary users of
this information to be beneficiary advocates, insurance counselors,
and government entities--not beneficiaries. None of the HMO-specific
information HCFA routinely collects will be distributed directly to
beneficiaries.
Of all the information HCFA gathers, disenrollment rates may be
particularly useful in helping beneficiaries distinguish among
competing HMOs. When GAO analyzed HCFA disenrollment data for the
Miami and Los Angeles markets, it found that some plans have a much
better record than others of retaining Medicare enrollees. (See fig.
1.) For example, nearly 1 in 3 Medicare applicants either canceled or
left Miami's CareFlorida within the first 3 months, whereas only 1 in
10 of Health Options' or Prudential Health Care's Medicare applicants
left this early. GAO observed a wide range in plans' total
disenrollment rates as well, as shown in figure 2.
Figure 1: Percent of
Applicants Leaving HMOs Within
3 Months--Highest and Lowest
HMO Rates in Market Area in
1995
(See figure in printed
edition.)
Figure 2: Total Disenrollment
Rates--Highest and Lowest HMO
Rates in Market Area in 1995
(See figure in printed
edition.)
Disenrollment statistics do not distinguish among the many reasons
for voluntary disenrollment (GAO excluded disenrollments due to death
or loss of eligibility), but they can serve as caution signals. If
disenrollment rates were publicized, informed beneficiaries could ask
sales representatives tough questions and seek additional information
before deciding to join an HMO with a disenrollment rate
substantially higher than its competitors'. HMOs would also gain
from the publicizing of disenrollment rates because they could then
compare their performance with the competition.
PRINCIPAL FINDINGS
---------------------------------------------------------- Chapter 0:4
MEDICARE DOES NOT SHARE
AVAILABLE HEALTH PLAN
INFORMATION WITH ITS
BENEFICIARIES
-------------------------------------------------------- Chapter 0:4.1
Though Medicare is the nation's largest purchaser of managed care
services, it lags other large purchasers in helping beneficiaries
choose among plans. The Federal Employees Health Benefits Program,
the California Public Employees' Retirement System, Minnesota
Medicaid, Xerox Corporation, and Southern California Edison are all
large health care purchasers that provide enrollees with comparative
information such as premium rates, benefits, out-of-pocket costs, and
member satisfaction survey results for available plans. By contrast,
HCFA does not routinely provide beneficiaries any comparative
information on the Medicare HMOs available in their area.
HCFA's San Francisco regional office has demonstrated that cost and
benefit comparison charts can be readily constructed using data HCFA
already collects. For the last 2 years, that office has produced
comparison charts for the Los Angeles, San Francisco, Arizona, and
Nevada market areas.\2 However, the office distributes these charts
primarily to the HMOs, some news organizations, and federally
supported insurance counselors.\3 Beneficiaries can request these
charts from HCFA's regional office, but few beneficiaries know the
charts exist. Even the volunteers staffing the insurance counseling
offices may be unaware of the charts. When GAO staff called a Los
Angeles insurance counselor and asked specifically about Medicare HMO
information, GAO was not told about the comparison charts.
HCFA is working to develop "electronic" comparison charts for all
Medicare HMOs. HCFA has not yet determined the format of these
charts because it is still studying the information needs of
beneficiaries. However, the agency plans initially to include
information on HMOs' benefits and premiums and later add other
information. By producing this information in an electronic form,
HCFA will be able to update the information as the Medicare HMO
market evolves. If this information exists only on the Internet,
however, it may be relatively inaccessible to the very individuals
who would find it useful.
For beneficiaries considering Medicare managed care for the first
time or switching to a new plan, acquiring information on all area
HMOs is time consuming. The toll-free number that beneficiaries are
supposed to call to get a list of available plans appears in the back
of their Medicare handbook. However, the handbook generally is
mailed to only those individuals turning age 65 or to beneficiaries
who specially request it. Even after finding the number,
beneficiaries face challenges in obtaining and comparing HMO
information. When GAO called all 14 Medicare HMOs in Los Angeles to
request their marketing materials, information from only 10 plans was
received after several weeks and several follow-up calls. Some plans
were reluctant to mail the information but offered to send it out
with a sales agent. Declining visits from sales agents, GAO finally
obtained the missing brochures by calling the HMOs' marketing
directors and insisting that the marketing materials be mailed.
Using marketing materials alone to compare HMOs' benefits and costs
is extremely difficult because each plan uses different formats and
terminology. One Los Angeles HMO's "summary of benefits" spanned 14
pages; another had only a 1-page summary. (See fig. 2.2 in ch. 2.)
In the absence of standard formats and terminology, beneficiaries
seeking information on mammography benefits, for example, had to look
under "mammography," "X ray," or another category, depending on the
particular brochure. Some HMOs used veiled language to note access
restrictions. For example, one plan repeatedly claimed that "our
primary care physicians can refer you to a specialist" but never
clearly stated the HMO's policy that beneficiaries must obtain a
referral before seeing a specialist. HCFA plans to implement the
"National Managed Care Marketing Guideline" for HMO marketing
materials starting in 1997. However, this guideline--as currently
drafted--will not require standard formats or terminology.
HCFA has a wealth of data, collected for program administration and
contract oversight purposes, that can indicate beneficiaries'
relative satisfaction with individual HMOs. These indicators include
statistics on beneficiary disenrollment and complaint rates. HCFA
collects other HMO-specific information, including plans' financial
data and reports from HCFA's periodic monitoring visits to HMOs.
However, HCFA has released none of this potentially useful
information directly to Medicare beneficiaries.
--------------------
\2 Recently, HCFA's regional office in Philadelphia began producing
similar comparison charts.
\3 These counselors, many of whom are volunteers, are available
through the federally supported but state-managed Information,
Counseling, and Assistance (ICA) program. ICA counselors can provide
beneficiaries with general information about Medicare, Medicaid,
managed care plans, and various types of health insurance available
to supplement Medicare.
PUBLISHING DISENROLLMENT
RATES COULD DISCOURAGE POOR
MARKETING PRACTICES
-------------------------------------------------------- Chapter 0:4.2
Because Medicare beneficiaries enrolled in HMOs may choose each month
to switch plans or return to fee for service, an analysis comparing
plans' disenrollment rates can suggest beneficiaries' relative
satisfaction with competing HMOs. Despite the value of such an
analysis, however, HCFA does not routinely or systematically compare
HMOs' disenrollment rates. As a result, HCFA misses an opportunity
to pursue leads suggesting which HMOs might be disproportionately
responsible for marketing abuses or health care delivery problems.
Moreover, by not publishing the rates, HCFA (1) misses an opportunity
to show beneficiaries which plans have a good record of retaining
Medicare enrollees and (2) hinders HMOs' efforts to benchmark their
own performance.
GAO conducted its own analysis of HCFA disenrollment data and found
that Medicare HMOs' ability to retain beneficiaries varies widely
among HMOs in the same market. This finding is consistent with a
1988 GAO study comparing Medicare HMO disenrollment rates. For some
HMOs in GAO's review, disenrollment rates were high enough to raise
questions about whether the HMO's emphasis was on providing health
care to enrollees or recruiting new enrollees to replace the many who
disenrolled. In Miami, early disenrollment rates (beneficiaries who
canceled or left within 3 months) ranged from Prudential Health
Care's rate of 9 percent to CareFlorida's rate of 30 percent. Annual
disenrollment rates (total number of disenrollees as a percentage of
average total membership) for Miami HMOs ranged from Health Options's
rate of 12 percent to PCA Health Plan's rate of 37 percent. GAO
observed similar variation in Los Angeles, where early disenrollment
rates ranged from Kaiser's 5 percent to United Health Plan's rate of
29 percent, and annual disenrollment rates ranged from Kaiser's 4
percent to Foundation Health's 42 percent. (See ch. 3 for details.)
RECOMMENDATIONS
---------------------------------------------------------- Chapter 0:5
In August 1995, GAO recommended that the Secretary of Health and
Human Services (HHS), whose Department oversees HCFA, direct the HCFA
Administrator to publish, among other things, the comparative HMO
data it collects. In this report, GAO renews its previous
recommendations and recommends specific steps that the Secretary
should take to help Medicare beneficiaries make more informed health
care decisions. Among these steps, GAO calls for
-- standard formats and terminology in HMOs' informational
materials;
-- benefit and cost comparison charts with all Medicare HMO options
available for each market area; and
-- wide distribution of HMOs' disenrollment rates, complaint rates,
and summary results of HCFA's site monitoring visits.
AGENCY COMMENTS
---------------------------------------------------------- Chapter 0:6
HHS agreed with GAO that "Medicare beneficiaries need more
information and that informed beneficiaries can hold plans
accountable for the quality of care." HHS noted several HCFA
initiatives that will eventually yield information to help
beneficiaries choose plans right for their needs. GAO believes that
these initiatives move in the right direction but that HCFA could do
more for beneficiaries with information the agency already collects.
The full text of HHS' comments appears in appendix III.
INTRODUCTION
============================================================ Chapter 1
Between August 1994 and August 1996, enrollment in Medicare
risk-contract health maintenance organizations (HMO) rose by over 80
percent (from 2.1 million to 3.8 million), and the number of
risk-contract HMOs rose from 141 to 229. As managed care options
become increasingly available to Medicare beneficiaries, the need for
information that can help them make prudent health care decisions has
become more urgent. The need for straightforward and accurate
information is also important because in the past some HMO sales
agents have misled beneficiaries or used otherwise questionable sales
practices to get them to enroll.\4
--------------------
\4 Similar problems were identified over the sale of Medigap and
long-term care insurance. See Medigap Insurance: Better Consumer
Protection Should Result From 1990 Changes to Baucus Amendment,
(GAO/HRD-91-49, Mar. 5, 1991) and Long-Term Care Insurance: Risks
to Consumers Should Be Reduced (GAO/T-HRD-91-14, Apr. 11, 1991).
TRADITIONAL FEE-FOR-SERVICE
MEDICARE AVAILABLE TO ALL
BENEFICIARIES
---------------------------------------------------------- Chapter 1:1
For most 65-year-olds, notice of coverage for Medicare benefits comes
in the mail--a Medicare card from the Health Care Financing
Administration (HCFA), which administers the Medicare program.
Unless beneficiaries enroll in an HMO, HCFA automatically enrolls
them in Medicare's fee-for-service program.
Medicare's fee-for-service program, available nationwide, offers a
standard package of benefits covering (1) hospitalization and related
benefits (part A), with certain coinsurance and deductibles paid by
the beneficiary, and (2) physician and related services (part B) for
a monthly premium ($42.50 in 1996), a deductible, and coinsurance.
Medicare part B coverage is optional, though almost all beneficiaries
entitled to part A also enroll in part B. Many beneficiaries in the
fee-for-service program enhance their Medicare coverage by purchasing
a private insurance product known as Medigap. Medigap policies can
cost beneficiaries $1,000 a year or more and must cover Medicare
coinsurance. Some policies also cover deductibles and benefits not
covered under Medicare such as outpatient prescription drugs.
MEDICARE HMOS TYPICALLY OFFER
ADDITIONAL BENEFITS BUT
RESTRICT PROVIDER CHOICE
---------------------------------------------------------- Chapter 1:2
Medicare beneficiaries may enroll in a Medicare-approved "risk" HMO
if available in their area. Such a plan receives a fixed monthly
payment, called a capitation payment, from Medicare for each
beneficiary it enrolls. The payment is fixed per enrollee regardless
of what the HMO spends for each enrollee's care. An HMO paid by
capitation is called a risk-contract HMO because it assumes the
financial risk of providing health care within a fixed budget.
Although other types of Medicare managed care exist, almost 90
percent of Medicare beneficiaries now in managed care are enrolled in
risk-contract HMOs.\5
Compared with the traditional Medicare fee-for-service program, HMOs
typically cost beneficiaries less money, cover additional benefits,
and offer freedom from complicated billing statements. Although some
HMOs charge a monthly premium, many do not. (Beneficiaries enrolled
in HMOs must continue to pay the Medicare part B premium and any
specified HMO copayments.) HMOs are required to cover all Medicare
part A and B benefits. Many HMOs also cover part A copayments and
deductibles and additional services--such as outpatient prescription
drugs, routine physical exams, hearing aids, and eyeglasses--that are
not covered under traditional Medicare. In effect, the HMO often
acts much like a Medigap policy by covering deductibles, coinsurance,
and additional services.
In return for the additional benefits HMOs furnish, beneficiaries
give up their freedom to choose any provider. If a beneficiary
enrolled in an HMO seeks nonemergency care from providers other than
those designated by the HMO or seeks care without following the HMO's
referral policy, the beneficiary is liable for the full cost of that
care. Recently, Medicare allowed HMOs to offer a "point-of-service"
(POS) option (also known as a "self-referral" or "open-ended" option)
that covers beneficiaries for some care received outside of the
network.\6 This option is not yet widely available among Medicare
HMOs.
--------------------
\5 Fewer than 200,000 Medicare beneficiaries are enrolled in "cost"
HMOs, plans that do not restrict provider choice but require
beneficiaries to pay Medicare's coinsurance, deductibles, and other
charges for care received outside the HMO network. Cost plans are so
called because HCFA reimburses them for the reasonable cost of
providing covered Medicare services. About 300,000 beneficiaries are
enrolled in Health Care Prepayment Plans (HCPP)--a third type of
Medicare managed care. HCPPs do not operate like risk or cost HMOs.
For example, HCPPs may cover only Medicare part B services and may
have restrictive enrollment policies.
\6 HCFA guidelines specify that "Plans can design enrollees'
cost-sharing (premium, coinsurance, copayment, or deductible) for the
POS benefit. However, HCFA will review enrollee cost-sharing to
ensure that enrollees' charges for the POS benefit do not exceed the
adjusted community rate [which HCFA uses to determine the HMO's
payment]."
HMOS MARKET CONTINUOUSLY IN
RESPONSE TO BENEFICIARIES'
FREEDOM TO JOIN AND SWITCH
PLANS MONTHLY
---------------------------------------------------------- Chapter 1:3
Managed care plans' marketing strategies and enrollment procedures
reflect Medicare beneficiaries' freedom to move between the
fee-for-service and managed care programs. Unlike much of the
privately insured population under age 65, beneficiaries are not
limited to enrolling or disenrolling only during a specified "open
season;" they may select any of the Medicare-approved HMOs in their
area and may switch plans monthly or choose the fee-for-service
program. Thus, HMOs market their plans to Medicare beneficiaries
continuously rather than during an established 30- or 60-day
period.\7 HMOs and their sales agents, not HCFA, enroll beneficiaries
who wish to join a managed care plan.
Most beneficiaries have access to at least one Medicare HMO, and more
than 50 percent of beneficiaries have at least two HMOs available in
their area. In some urban areas, beneficiaries can choose from as
many as 14 different HMOs. Each HMO may be distinguished from its
competitors by its coverage of optional benefits, cost-sharing
arrangements, and network restrictions. As a practical matter, the
number of choices is likely to be greater than the number of HMOs
because a single HMO may offer multiple Medicare products, each with
its own combination of covered benefits and premium levels.
--------------------
\7 Medicare HMOs are required by law to have at least one 30-day
period each year when they accept new enrollees. In practice, most
HMOs have a continuous, year-round open enrollment period.
OBJECTIVES, SCOPE, AND
METHODOLOGY
---------------------------------------------------------- Chapter 1:4
In February 1996, Senator Pryor, the Ranking Minority Member of the
Senate Special Committee on Aging asked us to examine issues related
to the marketing, education, and enrollment practices of health plans
participating in the Medicare risk-contract HMO program.
Subsequently, he was joined by Committee Chairman Cohen and by
Senators Grassley, Breaux, Feingold, and Wyden as corequesters. This
report focuses on information that can help beneficiaries become
discerning consumers. In particular, the report reviews (1) HCFA's
performance in providing beneficiaries comparative information about
Medicare HMOs to assist their decision-making and (2) the usefulness
of readily available data that could inform beneficiaries and caution
them about poorly performing HMOs.
Our study focused on risk-contract HMO plans, which (as of August
1996) enrolled almost 90 percent of Medicare beneficiaries enrolled
in managed care. In conducting our study, we reviewed records at
HCFA headquarters and regional offices and interviewed HCFA
officials, Medicare beneficiary advocates, provider advocates,
Medicare HMO managers, and representatives of large health insurance
purchasing organizations. We also analyzed enrollment and
disenrollment data from HCFA's automated systems. In addition, we
reviewed beneficiary complaint case files and observed certain HCFA
oversight and education activities. Finally, we reviewed relevant
literature. Our work was performed between October 1995 and August
1996 in accordance with generally accepted government auditing
standards. (For further detail on our data analysis methodology, see
app. I.)
BENEFICIARIES DO NOT GET THE
INFORMATION NEEDED TO HELP THEM
CHOOSE AN HMO
============================================================ Chapter 2
Though Medicare is the nation's largest purchaser of managed care
services, it lags other large purchasers in helping beneficiaries
choose among plans. HCFA has responsibility for protecting
beneficiaries' rights and obtaining and disseminating information
from Medicare HMOs to beneficiaries. HCFA has not yet, however,
provided information to beneficiaries on individual HMOs. It has
announced several efforts to develop HMO health care quality
indicators. HCFA has, however, the capability to provide Medicare
beneficiaries useful, comparative information now, using the
administrative data it already collects.
ALTHOUGH OTHER LARGE PURCHASERS
OFFER COMPARATIVE BENEFIT
GUIDES, HCFA DOES NOT
---------------------------------------------------------- Chapter 2:1
Unlike leading private and public health care purchasing
organizations, Medicare does not provide its beneficiaries with
comparative information about available HMOs. Other large purchasers
of health care--for example, the Federal Employees Health Benefits
Program, the California Public Employees' Retirement System
(CalPERS), Minnesota Medicaid, Xerox Corporation, and Southern
California Edison--publish summary charts of comparative information
such as available plans, premium rates, benefits, out-of-pocket
costs, and member satisfaction surveys. Table 2.1 compares the
information provided by HCFA and these other large health purchasers.
Table 2.1
Comparative Information Provided to
Prospective Enrollees by Selected Health
Care Purchasers
Minnes
ota S.
Medica Medica FEHB CalPER Xero Cal.
Feature re id P S x Ed.
-------------- ------ ------ ---- ------ ---- ------
Number of 38.0 142,00 4.1 428,00 51,0 24,000
enrollees\a millio 0 mill 0 00
n ion
Maximum number 14 5 17 12 6 5
of HMOs
available to
enrollees\b
Information
provided
Available X\c X X X X X
plans
Detailed X\d X\d X\d X
benefits
Premiums, Not X X X X
deductibles, applic
copayments able
Member X X X X X
satisfaction
survey
Plan X X X
performance
indicators
----------------------------------------------------------
Note: FEHBP is Federal Employees Health Benefits Plan, Xerox is
Xerox Corporation, and S. Cal. Ed. is Southern California Edison.
\a Includes enrolled beneficiaries, employees, and annuitants but not
their dependents.
\b Number of HMOs available varies by beneficiary location.
\c Available only upon request.
\d Standardized benefits.
A few purchasers also give enrollees information that helps them
compare HMOs' provision of services in such areas as preventive
health and care of chronic illness. For example, CalPERS publishes
the percentage of members in each plan who receive cholesterol
screening, cervical and breast cancer screening, and eye exams for
diabetics. Some purchasers also provide indicators of physician
availability and competence, such as percentage of physicians
accepting new patients, physician turnover, and percentage of
physicians who are board certified.
COMPARATIVE BENEFITS
INFORMATION AVAILABLE TO
HCFA STAFF BUT NOT TO
MEDICARE BENEFICIARIES
-------------------------------------------------------- Chapter 2:1.1
HCFA currently collects benefit and cost data in a standardized
format from Medicare HMOs. HCFA's professional staff use the data to
determine that each HMO is providing a fairly priced package of
Medicare services or that Medicare is paying a fair price for the
services provided.\8 HCFA could provide this benefit and cost
information to beneficiaries with little additional effort.
Using these data, HCFA's regional office in San Francisco, on its own
initiative, developed benefit and premium comparison charts 2 years
ago for markets in southern and northern California, Arizona, and
Nevada. However, distribution of these charts has been limited
primarily to news organizations and insurance counselors.\9
Beneficiaries may request the charts, but few do because HCFA does
not widely publicize the charts' existence. In fact, when we called
a Los Angeles insurance counselor (without identifying ourselves as
GAO staff) and asked specifically about Medicare HMO information, we
were not told about the comparison charts. Recently, HCFA's
Philadelphia office began producing and distributing similar charts.
While HCFA's Office of Managed Care has been studying how to provide
information to beneficiaries for a year and a half, the local
initiatives in the San Francisco and Philadelphia offices demonstrate
that HCFA could be distributing comparison charts to beneficiaries
nationwide.
--------------------
\8 These data, which come from the HMOs' adjusted community rate
proposals, include whatever profit margin the HMO makes on its
commercial business. If an HMO's Medicare payment rate exceeds what
the HMO would charge commercially, it must use the difference (called
"savings") to provide additional services or lower premiums to its
Medicare enrollees or to reduce Medicare's payment rates.
\9 The Omnibus Budget Reconciliation Act of 1990 established a
federally funded, state-managed Information, Counseling, and
Assistance (ICA) program in response to concerns about the adequacy
of available information on Medicare coverage limitations and
supplemental (Medigap) insurance. ICA insurance counselors, many of
whom are volunteers, can provide beneficiaries with general
information about Medicare, Medicaid, managed care plans, and various
types of health insurance.
HMO MARKETING MATERIALS NOT
REQUIRED TO STANDARDIZE
PRESENTATION OR TERMINOLOGY
FOR BENEFITS
-------------------------------------------------------- Chapter 2:1.2
Although HMOs provide beneficiaries information about benefits and
premiums through marketing brochures, each plan uses its own
terminology to describe benefits, premiums, and the rules enrollees
must follow in selecting physicians and hospitals. Despite HCFA's
authority to do so, the agency does not require a standardized
terminology or format for describing benefits.\10 HCFA does review
HMO marketing and informational materials to prevent false or
misleading claims and to ensure that certain provider access
restrictions are noted. HCFA has not ensured that HMO marketing
materials are clear, however, because the agency does not require
standard terminology or formats.\11 For example, one plan's brochure,
to note its access restrictions, states that ". . . Should you
ever require a specialist, your plan doctor can refer you to one" but
never states that beneficiaries must get a referral before seeing a
specialist.
In addition, each HMO develops its own format to summarize its
benefits and premiums. As a result, beneficiaries seeking to compare
HMOs' coverage of mammography services, for example, have to look
under "mammography," "X ray," or another term, depending on the
particular brochure. The length of some HMOs' benefit summaries
varies widely. For example, some brochures we received from the Los
Angeles market, which has 14 Medicare HMOs, contain a summary of
benefits spanning 14 pages; others have only a 1-page summary. Such
diverse formats--without a comparison guide from HCFA--place the
burden of comparing the HMOs' benefits and costs exclusively on the
beneficiary.
--------------------
\10 HCFA plans to implement the "National Managed Care Marketing
Guideline" for all Medicare HMO marketing materials starting in 1997.
However, this guideline--as currently drafted--will not require
standard terminology and formats.
\11 In contrast, federal law (P.L. 101-508) requires Medigap
policies to be described using uniform language, definitions, and
format.
BENEFICIARIES MUST OBTAIN
AND DISTILL COMPARATIVE
INFORMATION THEMSELVES
-------------------------------------------------------- Chapter 2:1.3
To collect, distill, and compare HMO information would, in some
markets, require substantial time and persistence (see figs. 2.1 and
2.2). First, beneficiaries would need to find and call a toll-free
number to learn the names of available HMOs. This telephone number
appears in the back of the Medicare handbook. However, the handbook
generally is mailed to only those individuals turning age 65 or to
beneficiaries who specially request it. Next, beneficiaries would
have to contact each HMO to get benefit, premium, and provider
network details. Finally, they would have to compare plans' benefit
packages and cost information without the benefit of standardized
formats or terminology. This set of tasks is likely to be difficult
for determined beneficiaries and may be too daunting for others.
Figure 2.1: Steps a
Beneficiary Would Need to Take
to Compare Benefits and
Premiums of Competing HMOs
(See figure in printed
edition.)
Figure 2.2: Beneficiary
Compares Los Angeles' HMOs'
Benefits Using a Single,
Standardized Chart; In
Contrast, Medicare-Approved HMO
Brochures Cover the Wall
(See figure in printed
edition.)
(See figure in printed
edition.)
To test the difficulty of these tasks, we called all 14 Medicare HMOs
in Los Angeles to request their marketing materials. After several
weeks and follow-up calls, we had received information from only 10
plans. Some plans were reluctant to mail the information but offered
to send it out with a sales agent. Declining visits from sales
agents, we finally obtained the missing brochures by calling the
HMOs' marketing directors, identifying ourselves as GAO staff, and
insisting that the marketing materials be mailed. The materials
gathered show that beneficiaries in the Los Angeles market would have
to sort through pounds of literature and compare benefits charts of
14 different HMOs. (See fig. 2.2.)
Although HCFA has been studying ways to provide comparative benefits
information nationwide since mid-1995, it has decided not to
distribute printed information directly to beneficiaries. Instead,
HCFA plans to make information on benefits, copayments, and
deductibles available on the Internet. HCFA expects the primary
users of this information to be beneficiary advocates, insurance
counselors, and government entities--
not beneficiaries. As of September 6, 1996, HCFA expected the
information to be available electronically by June 1997--at the
earliest.
HCFA COULD READILY PROVIDE
INDICATORS OF BENEFICIARY
SATISFACTION AND OTHER
PLAN-SPECIFIC INFORMATION
---------------------------------------------------------- Chapter 2:2
HCFA has a wealth of data, collected for program administration and
contract oversight purposes, that can indicate beneficiaries'
relative satisfaction with individual HMOs. The data include
statistics on beneficiary disenrollment and complaints. HCFA also
collects other information that could be useful to beneficiaries,
including HMOs' financial data and reports from HCFA's periodic
monitoring visits to HMOs. As noted, however, HCFA does not
routinely distribute this potentially useful information.
DISENROLLMENT DATA
-------------------------------------------------------- Chapter 2:2.1
Because of Medicare beneficiaries' freedom to disenroll from managed
care or change plans in any month, disenrollment data objectively
measure consumer behavior toward and indicate their satisfaction with
a specific HMO.\12 Disenrollments may be more reliable than some
other satisfaction measures--such as surveys--because disenrollment
data do not depend on beneficiary recollection.
Enrollment and disenrollment data, although collected primarily to
determine payments to HMOs, can be used to construct several useful
indicators of beneficiary satisfaction, such as the
-- annual disenrollment rate: total number of disenrollees as a
percentage of total enrollment averaged over the year,
-- cancellation rate: percent of signed applications canceled
before the effective enrollment date,
-- "rapid" disenrollment rate: percent of new enrollees who
disenroll within 3 months,
-- "long-term" disenrollment rate: percent of enrollees who
disenroll after 12 months,
-- rate of return to fee for service: percent of disenrollees who
return to traditional Medicare rather than enroll in another
HMO, and
-- retroactive disenrollment rate: percent of disenrollments
processed retroactively by HCFA (typically done in cases of
alleged beneficiary misunderstanding or sales agent abuse).
Disenrollment rates that are high compared with rates for competing
HMOs can serve as early warning indicators for beneficiaries, HMOs,
and HCFA. (See ch. 3 for a discussion on interpreting these
indicators and an analysis of disenrollment rates for HMOs serving
the Miami and Los Angeles markets.) Disenrollment rates have already
been used to help measure membership stability and enrollee
satisfaction in the Health Plan Employer Data and Information Set
(HEDIS), developed by large employers, HMOs, and HCFA under the
auspices of the National Committee on Quality Assurance (NCQA).
However, HEDIS' measure of disenrollment behavior is limited to a
single indicator--an annual disenrollment rate. HCFA could perform a
more extensive analysis of the disenrollment data available now.
--------------------
\12 Medicare disenrollments measure actual behavior and reflect
ongoing choices of individual beneficiaries. Disenrollment data are
less useful as a satisfaction indicator for commercial (non-Medicare)
HMO enrollees. Commercial enrollees typically cannot change plans
monthly and have fewer choices available when changing plans is
allowed. Furthermore, commercial disenrollment may occur when an
employer decides to change the HMO with which it contracts.
Consequently, the disenrollment that results does not necessarily
indicate enrollee dissatisfaction.
COMPLAINT DATA
-------------------------------------------------------- Chapter 2:2.2
The relative volume of beneficiary complaints about HMOs is another
satisfaction indicator that HCFA could readily provide
beneficiaries.\13 HCFA regional staff routinely receive beneficiary
complaints of sales abuses, the unresponsiveness of plans to
beneficiary concerns, and other more routine service and care issues.
Regardless of the type of complaint, a comparison of the number of
complaints per 1,000 HMO members can give beneficiaries a view of
members' relative satisfaction with area HMOs. Although some HCFA
regional offices already track complaints through the Beneficiary
Inquiry Tracking System, HCFA has no plans to make these data
consistent across regions or provide beneficiaries complaint volume
information.
--------------------
\13 Some states, including Florida and New York, routinely provide
complaint rates to the public.
HMO FINANCIAL INFORMATION
-------------------------------------------------------- Chapter 2:2.3
HCFA could readily report on various HMO financial indicators. Large
employers and HMOs have already incorporated several financial
indicators--such as plans' total revenue and net worth--into the
current Health Plan Employer Data and Information Set (HEDIS 2.5).
HEDIS 2.5 also requires HMOs to report the percentage of HMO revenues
spent on medical services--known to insurers as the medical "loss
ratio." Xerox Corporation, for example, publicizes medical loss
ratios to help employees compare the plans it offers. In addition,
federal law establishes loss ratio standards for Medigap insurers.
HCFA routinely collects financial information from HMOs in standard
formats it jointly developed with the National Association of
Insurance Commissioners in the early 1980s. HCFA uses these data to
monitor contracts for compliance with federal financial and quality
standards.
HCFA MONITORING VISIT
RESULTS
-------------------------------------------------------- Chapter 2:2.4
HCFA could also report the results of periodic visits to verify HMO
contract compliance in 13 separate dimensions, such as health
services delivery, quality, and utilization management; treatment of
beneficiaries in carrying out such administrative functions as
marketing, enrollment, and grievance procedures; and management,
administration, and financial soundness.
After each visit, HCFA records any noncompliance with standards but
does not make these reports public unless a Freedom of Information
Act request is made. In contrast, NCQA, a leading HMO accreditation
organization, has begun distributing brief summaries of its site
visit reports to the public. NCQA's summaries rate the degree of HMO
compliance on six different dimensions, including quality management
and improvement, utilization management, preventive health services,
medical records, physician qualifications and evaluation, and
members' rights and responsibilities.
ALTHOUGH HCFA HAS PLANS FOR
CONSUMER INFORMATION,
BENEFICIARIES AWAIT BASIC
COMPARATIVE DATA
---------------------------------------------------------- Chapter 2:3
HCFA has authority to obtain and distribute useful comparative data
on health plans. Although HCFA is not now providing these data to
beneficiaries and the marketplace, it is studying several future
options, including joint efforts with the private sector.
Eventually, these efforts could yield comparative plan information on
satisfaction survey results, physician incentives, measures of access
to care, utilization of services, health outcomes, and other aspects
of plans' operations. The following are examples of these efforts:
-- HCFA is developing a standard survey, through HHS' Agency for
Health Care Policy and Research, to obtain beneficiaries'
perceptions of their managed care plans. This effort aims to
standardize surveys and report formats to yield comparative
information about, for example, enrollees' experiences with
access to services, interactions with providers, continuity of
care, and perceived quality of care.
-- HCFA has been developing regulations since 1990 to address
financial incentives HMOs give their physicians. HCFA's
regulations, published in 1996 and scheduled to be effective
beginning in January 1997, will require HMOs to disclose to
beneficiaries, on request, the existence and type of any
physician incentive arrangements that affect the use of
services.
-- HCFA is working with the managed care industry, other
purchasers, providers, public health officials, and consumer
advocates to develop a new version of HEDIS--HEDIS 3.0--that
will incorporate measures relevant to the elderly population.
It is also working with the Foundation for Accountability
(FAcct) to develop more patient-oriented measures of health care
quality.
The HEDIS and FAcct initiatives are aimed at generating more direct
measures of the quality of medical care and may require new data
collection efforts by plans. These initiatives may eventually
provide Medicare beneficiaries with objective information that will
help them compare available plans. However, HCFA could do more to
inform beneficiaries today. For this reason, we stress the
importance of such measures as disenrollment rates, complaint rates,
and results of monitoring visits, which can be readily generated from
information HCFA routinely compiles.
PUBLISHING DISENROLLMENT RATES
COULD DISCOURAGE POOR MARKETING
PRACTICES
============================================================ Chapter 3
Public disclosure of disenrollment rates could help beneficiaries
choose among competing HMOs and encourage HMOs to do a better job of
marketing their plans and serving enrollees. Nonetheless, HCFA does
not routinely compare plans' disenrollment rates or disclose such
information to the public.
Because Medicare beneficiaries enrolled in HMOs can vote with their
feet each month--by switching plans or returning to fee for service--
comparing plans' disenrollment rates can suggest beneficiaries'
relative satisfaction with competing HMOs. For this reason, we
analyzed HCFA disenrollment data and found that Medicare HMOs'
ability to retain beneficiaries varies widely, even among HMOs in the
same market. In the Miami area, for example, the share of a Medicare
HMO's total enrollment lost to voluntary disenrollment in 1995 ranged
from 12 percent--about one in eight enrollees--to 37 percent--more
than one in three enrollees.\14
--------------------
\14 The disenrollment rates reported here exclude beneficiaries who
were involuntarily disenrolled due to death or loss of part B
entitlement. See app. I for a complete discussion of our rate
calculation methodology.
RELATIVE DISENROLLMENT RATES
INDICATE BENEFICIARY
SATISFACTION
---------------------------------------------------------- Chapter 3:1
Although all HMOs experience some voluntary disenrollment,
disenrollment rates should be about the same for all HMOs in a given
market area if beneficiaries are about equally satisfied with each
plan.\15 An HMO's disenrollment rate compared with other HMOs in the
same market area, rather than a single HMO's disenrollment rate, can
indicate beneficiary satisfaction with care, service, and
out-of-pocket costs.
High disenrollment rates may result from poor education of enrollees
during an HMO's marketing and enrollment process. In this case
enrollees may be ill informed about HMO provider-choice restrictions
in general or the operation of their particular plan. High
disenrollment rates may also result from beneficiaries'
dissatisfaction with access or quality of care. Alternatively, high
disenrollment rates may reflect a different aspect of relative
satisfaction--beneficiaries' awareness that competing HMOs are
offering better benefits or lower premiums. While statistics alone
cannot distinguish among these causes, a relatively high
disenrollment rate should caution beneficiaries to investigate
further before enrolling.
--------------------
\15 HMOs serving a larger geographic area may have slightly fewer
disenrollments than competing HMOs serving a smaller area. This may
be due to beneficiaries moving out of the smaller area. HMOs in Los
Angeles do vary in the geographic area they cover, but these
differences could not explain the substantial differences in
disenrollment rates we observed. In Miami, all HMOs cover the same
territory so out-of-service-area moves should affect all HMOs'
disenrollment rates about equally.
BENEFICIARIES VOLUNTARILY
DISENROLL FROM HMOS FOR MANY
REASONS
-------------------------------------------------------- Chapter 3:1.1
Medicare beneficiaries voluntarily disenroll from their HMOs for a
variety of reasons: many who leave are dissatisfied with their HMOs'
service, but others leave for different reasons. A 1992 study
reported that 48 percent of disenrollees from Medicare HMOs cited
dissatisfaction as their reason for leaving, 23 percent cited a
misunderstanding of HMO services or procedures, and 29 percent cited
some other reason--such as a move out of the HMO's service area.\16
Some commonly cited reasons beneficiaries disenroll include
-- dissatisfaction with the HMO's provision of care,
-- did not know had joined an HMO,
-- did not understand HMO restrictions when joined,
-- reached HMO's annual drug benefit limit and enrolled in a
different HMO for continued coverage of prescription drugs,
-- attracted to competing HMO offering lower premiums or more
generous benefits,
-- moved out of HMO service area, and
-- personal physician no longer contracts with HMO.
--------------------
\16 Frank W. Porell and others, Factors Associated with
Disenrollment from Medicare HMOs: Findings from a Survey of
Disenrollees (Boston: Health Policy Research Consortium of Brandeis
University, 1992).
HMOS' DIFFERING DISENROLLMENT
RATES SUGGEST THAT BENEFICIARY
SATISFACTION VARIES WIDELY
---------------------------------------------------------- Chapter 3:2
Health plans' retention of their members varies widely, as
illustrated by our analysis of these rates for the Miami and Los
Angeles markets.\17 (See fig. 3.1 for the names of these HMOs and
their associated Medicare products.) For some HMOs, disenrollment
rates were high enough to raise questions about whether the HMO's
business emphasis was on providing health care or on marketing to new
enrollees to replace the many who disenroll.
Figure 3.1: Los Angeles and
Miami Risk HMOs and Their
Associated Medicare Products
(See figure in printed
edition.)
--------------------
\17 The wide variation in HMO disenrollment rates is consistent with
our earlier findings. In 1988, we reported that "about one of six
people enrolled in 95 risk-based HMOs across the country . . .
terminated their enrollment within 1 year. The variation in
disenrollment rates was substantial, ranging from about 3.5 percent
for the 10 HMOs having the lowest rates to about 36 percent for the
10 HMOs having the highest rates." Medicare: Experience Shows Ways
to Improve Oversight of Health Maintenance Organizations
(GAO/HRD-88-73, Aug. 17, 1988).
1995 DISENROLLMENT RATE
REACHED 37 PERCENT FOR ONE
MIAMI HMO, 42 PERCENT FOR
ONE LOS ANGELES HMO
-------------------------------------------------------- Chapter 3:2.1
The voluntary disenrollment rates\18 of the seven\19 plans active in
the Miami market for all of 1995 varied substantially as measured by
the percentage of an HMO's average Medicare enrollment lost to
disenrollment. (See fig. 3.2.) PCA Health Plan of Florida's (PCA)
disenrollment rate reached 37 percent; two other HMOs (HIP Health
Plan of Florida (HIP) and CareFlorida) had disenrollment rates of 30
percent or higher. In contrast, Health Options had a disenrollment
rate of 12 percent. The remaining five plans had a median
disenrollment rate of about 17 percent. To keep total enrollment
constant, HMOs must replace not only those members who leave
voluntarily, but also those members who die.\20 Thus, PCA had to
recruit new enrollees equal in number to 41 percent of its membership
just to maintain its total enrollment count.
Figure 3.2: Miami HMOs' Total
Disenrollment Rates, 1995
(See figure in printed
edition.)
Note: Total disenrollment rates are the number of beneficiaries who
disenrolled in 1995 compared with the average number of enrollees in
1995. We divided disenrollment--excluding disenrollment due to death
or loss of eligibility--in each quarter by the average enrollment
during that quarter to get a quarterly disenrollment rate and then
summed the rates from four quarters to get each HMO's annual
disenrollment rate. For example, an HMO that lost 5 percent of its
Medicare membership in the first quarter, 7 percent in the second
quarter, 6 percent in the third quarter, and 7 percent in the fourth
quarter would have an annual disenrollment rate of 25 percent.
The Los Angeles market, like Miami's, showed substantial variation in
HMOs' disenrollment rates. (See fig. 3.3.) Los Angeles' rates, in
fact, varied slightly more than Miami's. Foundation Health had the
highest disenrollment rate (42 percent); Kaiser Foundation Health
Plan (Kaiser) had the lowest (4 percent).
Figure 3.3: Los Angeles HMOs'
Total Disenrollment Rates, 1995
(See figure in printed
edition.)
--------------------
\18 Consistent with HCFA's definition in its online database system,
voluntary disenrollment includes all disenrollments except those due
to death or loss of eligibility.
\19 We could not compute an annual disenrollment rate for two HMOs in
Miami because they did not operate for a full 12 months during 1995.
HIP operated for the last three quarters of 1995 and had quarterly
disenrollment rates of 12 percent, 13 percent, and 8 percent.
Neighborhood operated for the last two quarters of 1995 and had
disenrollment rates of 11 percent in both quarters. If we annualized
these rates to make them comparable to the HMOs shown on the chart,
HIP and Neighborhood would both have disenrollment rates of 44
percent.
\20 Some members are involuntarily disenrolled because of their loss
of Medicare eligibility, but this affects a relatively small number
of beneficiaries.
NEARLY ONE IN THREE NEW
ENROLLEES LEFT MIAMI HMO
WITHIN 3 MONTHS OF JOINING
-------------------------------------------------------- Chapter 3:2.2
Although reasons for disenrollment vary, beneficiaries who leave
within a very short time are more likely to have been poorly informed
about managed care in general or about the specific HMO they joined
than those who leave after a longer time.\21
Consequently, early disenrollment rates may better indicate
beneficiary confusion and marketing problems than total disenrollment
rates.
Our analysis showed wide variation in plans' early disenrollment
rates. In our calculations we included both
cancellations--beneficiaries who signed an application but canceled
before the effective enrollment date--and "rapid
disenrollment"--beneficiaries who left within 3 months of enrollment.
In 1995, Medicare HMOs in the Miami market had
-- cancellation rates of 3 to 8 percent,
-- rapid disenrollment rates of 6 to 23 percent, and
-- combined cancellations and rapid disenrollments of 9 to 30
percent.
As figure 3.4 shows, nearly one in three beneficiaries who signed a
CareFlorida application and more than one in five beneficiaries who
signed a PCA application either canceled or left within the first 3
months. In contrast, only about 10 percent of Health Options' and
Prudential's applicants left this early.
Figure 3.4: Canceled
Applications and Rapid
Disenrollments in the Miami
Market, 1995
(See figure in printed
edition.)
In 1995, Medicare HMOs in the Los Angeles market had
-- cancellation rates of 1 to 7 percent,
-- rapid disenrollment rates of 4 to 22 percent, and
-- combined cancellations and rapid disenrollments of 5 to 29
percent.
As figure 3.5 shows, a few Los Angeles plans lost beneficiaries at a
rate significantly higher than the market average, and a few
performed notably better than the market average. The broad middle
group of plans lost between about 9 and 14 percent of new applicants
before the 3-month time frame.
Figure 3.5: Canceled
Applications and Rapid
Disenrollments in the Los
Angeles Market, 1995
(See figure in printed
edition.)
--------------------
\21 A 1992 study of beneficiary disenrollment found that 24.1 percent
of the beneficiaries who disenrolled within 3 months did not realize
they had enrolled in an HMO. In contrast, only 8 percent of those
who disenrolled after 2 years did not realize they had been enrolled
in an HMO. See Porell and others.
BENEFICIARY CONFUSION, ABUSIVE
SALES PRACTICES HELP EXPLAIN
HIGH DISENROLLMENT RATES
---------------------------------------------------------- Chapter 3:3
The substantial variation in early disenrollments suggests that some
HMOs do a better job than others of representing their plans to
potential enrollees. Two 1991 HHS Office of Inspector General (OIG)
studies\22 support this idea. According to the studies, about one in
four CareFlorida enrollees did not understand that they were joining
an HMO, and one in four did not understand that they would be
restricted to HMO physicians after they enrolled. In contrast, only
about 1 in 25 Health Options enrollees failed to understand these
fundamentals. OIG reported that CareFlorida's disenrollment rates
among beneficiaries enrolled less than a year were the highest in the
Miami market for the federal fiscal years 1988 and 1989. This
pattern persists, as our analysis of 1995 early disenrollment data
shows.
Complaints to HCFA regional offices of beneficiary confusion
primarily fall into one of two categories: (1) mistaking the HMO
application for a Medigap insurance application and (2) not
understanding that HMO enrollees are restricted to certain providers.
Confusion, whether the result of beneficiary ignorance of Medicare's
HMO option or intentional misrepresentation by HMO sales agents,
exposes beneficiaries to unanticipated health expenses.
Beneficiaries may also face months of uncertainty about their insured
status and which specific providers they must see to have their
health expenses covered.
--------------------
\22 Marketing Practices of South Florida HMOs Serving Medicare
Beneficiaries, HHS OIG, OEI-04-91-00630 (Washington, D.C.: Nov.
1991) and Miami Area HMOs: Medicare Enrollment Patterns, HHS OIG,
OEI-04-91-00640 (Washington, D.C.: Nov. 1991).
BENEFICIARIES MAY CONFUSE
HMOS WITH SUPPLEMENTAL
MEDIGAP INSURANCE
-------------------------------------------------------- Chapter 3:3.1
A typical complaint, according to HCFA staff, involves beneficiaries
who find themselves enrolled in an HMO when they thought they were
signing up for a Medicare supplemental policy. For example, in
February 1995, a husband and wife signed an application for a South
Florida HMO. They continued using their former physicians, who were
not with the HMO, and incurred 17 separate charges in May 1995 for a
knee replacement, including related services and a hospital stay.
When Medicare denied payment, the couple found they were enrolled in
the HMO. The HMO also denied payment, so the couple disenrolled,
through the HMO, effective May 31. Still facing unpaid claims, they
contacted HCFA in mid-June and complained that the sales agent had
"talked real fast" and misrepresented the HMO plan as supplemental
insurance. They allege he later told them they "didn't read the fine
print." They complained that neither the government (Medicare) nor
the sales agent explained the consequences of enrollment, and they
would not have enrolled if they had known they would be giving up
fee-for-service Medicare. In late July, HCFA retroactively
disenrolled the couple and eventually paid their bills under
fee-for-service Medicare. The HMO told HCFA that the sales agent had
been terminated because of past concerns.
BENEFICIARIES MAY NOT
UNDERSTAND HMO RESTRICTIONS
-------------------------------------------------------- Chapter 3:3.2
Another leading category of complaints, according to HCFA staff,
involves new HMO enrollees who do not understand HMO restrictions on
access to care. In 1995, OIG reported\23 that nearly one in four
Medicare enrollees did not answer affirmatively when asked if they
had a good knowledge from the beginning of how the HMO would operate;
and one in four did not know they could appeal HMO denials of care
they believe they are entitled to. Furthermore, 1 in 10 did not
understand that they would need a referral from their primary care
physician before they could see a specialist. The following
complaint to HCFA about a Miami HMO illustrates beneficiary confusion
over HMO restrictions.
CareFlorida marketed its plan to an 81-year-old woman who
subsequently enrolled in the plan effective February 1994, although
she traveled regularly to a distant state. In her first months of
membership, she visited her doctor, who was with the HMO. When she
later visited a non-network physician who had also been her regular
provider, Medicare denied her claims. She then requested to
disenroll and told HCFA that if she had understood the requirement to
visit specific providers, she would not have enrolled in the HMO.
HCFA disenrolled the beneficiary from the plan effective with her use
of non-network providers. This left her responsible for about $700
in out-of-plan charges.
Other typical misunderstandings cited by HCFA staff and local
insurance counselors include not understanding restrictions on access
to specialists or other services nor restrictions to a specific
medical group in an HMO's provider network.
--------------------
\23 Beneficiary Perspectives of Medicare Risk HMOs, HHS OIG,
OEI-06-91-00730 (Washington, D.C.: Mar. 1995).
SOME HMO SALES PRACTICES ARE
CLEARLY ABUSIVE
-------------------------------------------------------- Chapter 3:3.3
Medicare regulations prohibit certain marketing practices, such as
activities that mislead, confuse, or misrepresent; door-to-door
solicitation; and gifts or payments used to influence enrollment
decisions. These prohibitions are to help protect beneficiaries from
abusive sales practices. Although HCFA staff could not measure the
frequency of sales abuses, they expressed concern about continuing
complaints of apparent abuses by sales agents.
A recurring complaint, according to HCFA staff, is from beneficiaries
whose signatures on enrollment forms are acquired under false
pretenses. Many of these beneficiaries mistakenly believed that the
form they signed--actually an enrollment form--was a request for more
information or that it confirmed attendance at a sales presentation.
In 1991, HCFA investigated the marketing practices of an HMO after
receiving complaints and noting a high rate of retroactive
disenrollments. The complaints alleged that sales agents were asking
beneficiaries to sign a form indicating the agent had made a
presentation. In fact, the document was an enrollment form.
A recent case documented by HCFA staff is one in which at least 20
beneficiaries were inappropriately enrolled in an HMO after attending
the same sales seminar in August 1995. The beneficiaries thought
they were signing up to receive more information but later discovered
the sales agent had enrolled them in the plan.
In other cases, beneficiaries' signatures were forged. In January
1995, for example, a beneficiary was notified by his medical group
before an appointment that he was now enrolled in another plan. The
beneficiary had no idea how this could be as he had not intended to
change plans. Though the beneficiary signs with an "X," the new
enrollment application was signed with a legible cursive signature.
HCFA re-enrolled the beneficiary into his former plan but took no
action against the plan or sales agent.
HCFA'S REGULATORY APPROACH DOES
NOT PROTECT BENEFICIARIES FROM
HMOS NOT MEETING FEDERAL
STANDARDS
---------------------------------------------------------- Chapter 3:4
HCFA's failure to take effective enforcement actions and to inform
beneficiaries allows problems to persist at some HMOs. Historically,
HCFA has been unwilling to sanction the HMOs it cites for violations
found repeatedly during site monitoring visits. In 1988, 1991, and
1995, we reported on the agency's pattern of ineffective oversight of
HMOs violating Medicare requirements for marketing, beneficiary
appeal rights, and quality assurance. Table 3.2 illustrates the
weakness of HCFA's responses in addressing one Florida HMO's
persistent problems. In the absence of HMO-specific performance
indicators, beneficiaries joining this HMO have no way of knowing
about its problem-plagued history spanning nearly a decade. Our
reports show that this is not an isolated example.
Table 3.2
HCFA Regulatory Actions Not Successful
in Improving Performance of a Miami HMO
With Persistent Problems
HCFA response
to HMO
monitoring
Time frame HMO performance visit findings
------------ ---------------------------- --------------
1987 CareFlorida\a granted Not applicable
Medicare contract.
Oct. 87- Disenrollment rates highest Not applicable
Sept. 89 in Miami market--29% within
6 months, 46% in 12 months,
according to HHS OIG
analysis.
Jan.-Oct. 41% of CareFlorida enrollees Not applicable
1990 surveyed by HHS OIG report
door-to-door marketing--a
prohibited practice. Also,
one in four CareFlorida
enrollees said they didn't
know they had enrolled in an
HMO.
Feb. 1991 Deficiencies in marketing, Requires
enrollment, and quality corrective
assurance found during HCFA action plan.
monitoring visit.
July 1992 HMO has not corrected 1991 Questions HMO
deficiencies. Additional management
deficiencies found by HCFA capability to
during monitoring visit. execute
contract;
requires new
corrective
action plan.
Aug.-Sept. HMO has not corrected 1992 Requires new
1994 deficiencies in marketing, corrective
appeals and grievance, and action plan.
quality assurance.
Additional deficiencies
during HCFA monitoring
visit.
Oct. 1994 CareFlorida is acquired by Not applicable
Foundation Health Plan.
1995 CareFlorida highest in Not applicable
cancellations (8%) and rapid
disenrollments (23%); second
highest in annual rate of
disenrollments (30%) among
Miami HMOs, according to GAO
analysis.
Feb. 1996 CareFlorida changes name to Not applicable
Foundation Health--A South
Florida Plan.
June 1996 HMO has not corrected many Requires new
prior deficiencies; corrective
additional deficiencies, action plan;
including failure to ensure warns HMO that
access to health services, these findings
found during HCFA monitoring may jeopardize
visit. contract or
require
sanctions.
----------------------------------------------------------
\a Until March 1990, this plan was named Heritage Health Plan of
South Florida, Inc.
ANALYZING AND PUBLISHING
DISENROLLMENT RATES COULD
IMPROVE HCFA OVERSIGHT AND
ENCOURAGE HMOS TO IMPROVE
PERFORMANCE
---------------------------------------------------------- Chapter 3:5
Disenrollment and complaint statistics can help identify HMOs whose
sales agents mislead or fail to adequately educate new enrollees.
However, HCFA does not routinely and systematically analyze these
data.\24 HCFA has uncovered problems with HMOs' sales operations
during routine visits to monitor contract compliance or when regional
staff have noticed an unusual amount of complaints or disenrollments.
The HHS OIG recently\25 recommended that systematically developed
disenrollment data be used in conjunction with surveys of
beneficiaries to improve HCFA's monitoring of HMOs. The OIG found
that higher disenrollment rates correlated with higher beneficiary
survey responses of poor service. Enrollees who said they got poor
service and whose complaints were not taken seriously were more
likely to come from HMOs with higher disenrollment rates. In
contrast to the other surveyed HMOs, those with the five highest
disenrollment rates were 1.5 times more likely to have beneficiaries
report poor service (18 percent versus 12 percent).
Although HCFA can identify HMOs with sales and marketing problems, it
lacks the information to identify specific sales agents who might be
at fault. HCFA does not routinely require HMOs to match
disenrollment and complaint statistics to individual sales agents.
In fact, HCFA made clear in 1991 that oversight standards for sales
agents dealing with Medicare beneficiaries would be left largely to
the states. States' regulation and oversight of sales agents vary,
although 32 states require HMO sales agents to be licensed.\26
Representatives of the Florida Department of Insurance and its HMO
monitoring unit said their oversight, beyond agent licensing,
consisted of responding to specific complaints. One official
commented that sales agents have to do something egregious to have
their licenses revoked.
HCFA's HMO manual suggests specific practices that HMOs could employ
to minimize marketing problems. These suggestions include verifying
an applicant's intent to enroll through someone independent of the
sales agent, using rapid disenrollment data to identify agents whose
enrollees have unusually high rates, and basing commissions and
bonuses on sustained enrollment. HCFA staff said that some plans
have implemented sales oversight like that suggested by HCFA, but
others have not. Regional staff noted that plans are more likely to
implement HCFA suggestions if they are trying to get approval for a
contract application or service area expansion. Some HCFA regions
have succeeded more than others in getting HMOs to improve their
oversight of marketing agents.
Publishing disenrollment data could encourage problem HMOs to reform
their sales practices and more closely monitor their agents. Agents'
compensation often includes incentives such as commissions for each
beneficiary they enroll. HMOs could structure their compensation to
give agents a greater incentive to adequately inform beneficiaries
about managed care in general and their plan in particular. For
example, some HMOs pay commissions on the basis of a beneficiary's
remaining enrolled for a certain number of months. Several HMOs
expressed concern that they did not know how their disenrollment
rates compared with those of their competitors. Plan managers have
told HCFA staff and us that comparative disenrollment information is
useful performance feedback.
Medicare HMOs do not compete on the basis of retention rates (low
disenrollment rates) because these rates are not publicized.
Publishing the rates would likely boost enrollment of plans with high
retention rates and encourage plans with low retention rates to
improve their performance.
--------------------
\24 Some HCFA regions have begun to analyze disenrollment data, but
their analyses are limited to the data available in standard HCFA
reports, called "McCoy reports." The format of these reports is
inflexible and hinders comparisons of HMOs. For example, McCoy
reports cannot be used to determine rapid disenrollment rates as
defined in our analysis. An estimate of this rate for each plan can
be constructed but only after performing several mathematical
computations. The extent to which McCoy reports are used as a
monitoring tool varies by HCFA region and monitoring staff.
\25 Medicare Risk HMO Performance Indicators, HHS OIG,
OEI-06-91-00734 (Washington, D.C.: Oct. 1995).
\26 The National Association of Insurance Commissioners' model act on
HMOs emphasizes licensing for sales agents.
CONCLUSIONS AND RECOMMENDATIONS
============================================================ Chapter 4
CONCLUSIONS
---------------------------------------------------------- Chapter 4:1
Millions of Medicare beneficiaries face increasingly complex managed
care choices with little or no comparative information to help them.
HCFA has not used its authority to provide comparative HMO
information to help consumers, even though it requires standardized
information for its internal use. As a result, information available
to beneficiaries is difficult or impossible to obtain and compare.
In contrast, other large purchasers--including the federal government
for its employees--ease their beneficiaries' decision-making by
providing summary charts comparing plans.
In addition, by not providing consumers with comparative information,
Medicare fails to capitalize on market forces and complement HCFA's
regulatory approach to seeking good HMO performance. In an ideal
market, informed consumers prod competitors to offer the best value.
Without good comparative information, however, consumers are less
able to determine the best value. HMOs have less incentive to
compete on service to beneficiaries when satisfaction or other
indicators of performance are not published. Wide distribution of
HMO-specific disenrollment and other data could make Medicare's HMO
markets more like an ideal market and better ensure that consumers'
interests are served.
HCFA could also make better use of indicators to improve its
oversight of HMOs. By establishing benchmarks and measuring HMOs'
performance against them, HCFA could focus on plans whose statistics
indicate potential problems--for example, on HMOs with high
disenrollment rates.
RECOMMENDATIONS
---------------------------------------------------------- Chapter 4:2
In August 1995, we recommended that the Secretary of HHS direct the
HCFA Administrator to develop a new, more consumer-oriented strategy
for administering Medicare's HMO program. One specific
recommendation called for HCFA to routinely publish (1) the
comparative data it collects on HMOs and (2) the results of its
investigations or any findings of noncompliance by HMOs. Although
HCFA has announced plans to gather new data, it has no plans to
analyze and distribute to beneficiaries the data on HMOs it currently
collects. Therefore, we are both renewing our previous
recommendations and recommending specific steps that the Secretary of
HHS should take to help Medicare beneficiaries make informed health
care decisions.
The Secretary should direct the HCFA Administrator to
-- require standard formats and terminology for important aspects
of HMOs' informational materials for beneficiaries, including
benefits descriptions;
-- require that all literature distributed by Medicare HMOs follow
these standards;
-- produce benefit and cost comparison charts with all Medicare
options available for each market area; and
-- widely publicize the availability of the charts to all
beneficiaries in markets served by Medicare HMOs and ensure that
beneficiaries considering an HMO are notified of the charts'
availability.
The Secretary should also direct the HCFA Administrator to annually
analyze, compare, and distribute widely HMOs'
-- voluntary disenrollment rates, including cancellations,
disenrollment within 3 months, disenrollment after 12 months,
total disenrollment, retroactive disenrollment, and rate of
return to fee for service;
-- rate of inquiries and complaints per thousand enrollees; and
-- summary results of HCFA's monitoring visits.
AGENCY COMMENTS AND OUR
RESPONSE
---------------------------------------------------------- Chapter 4:3
HHS agreed that "Medicare beneficiaries need more information and
that informed beneficiaries can hold plans accountable for the
quality of care." HHS noted several HCFA initiatives that will
eventually yield information to help beneficiaries choose plans right
for their needs. We believe that these initiatives move in the right
direction but that HCFA could do more for beneficiaries with
information the agency already collects. The full text of HHS'
comments appears in appendix III.
HHS outlined HCFA's efforts to produce HMO comparison charts that
will initially contain HMO costs and benefits and later may also
include other plan-specific information--such as the results of HMOs'
satisfaction surveys. HCFA expects advocates and insurance
counselors, not beneficiaries, to be the primary users of this
information. HCFA plans to make the charts "available to any
individual or organization with electronic access." Information in an
electronic form can easily be updated--a distinct advantage in a
market that is evolving as quickly as Medicare HMOs. Providing the
information in an electronic format, however, rather than in print,
may make it less accessible to the very individuals who would find it
useful.
HHS noted that HCFA is developing the "National Managed Care
Marketing Guideline," partly in response to beneficiary complaints of
confusion and misunderstanding caused by Medicare HMOs' marketing
practices. The guideline, to be implemented beginning in January
1997, will detail specific content areas to be covered in all
Medicare HMO marketing materials. The guideline, as currently
drafted, however, will not require standard formats or terminology
and thus may not alleviate many of the difficulties beneficiaries now
face when comparing HMOs' marketing materials.
Regarding our recommendation that disenrollment data be made
available to beneficiaries, HHS stated that HCFA is evaluating
different ways to express and present disenrollment rates. HHS
cautioned that a careful analysis of disenrollment is necessary
before meaningful conclusions can be drawn. We did not find such an
analysis to be difficult or overly time consuming. Our
recommendation is to publish disenrollment rates and let
beneficiaries decide if, as we found in Los Angeles, a 42-percent
annual disenrollment rate is meaningful in a market where competing
HMOs have disenrollment rates of 4 percent.
In short, HHS stated that HMO-specific information currently
collected by HCFA could not be made publicly available until
additional evaluation, data analysis, or development of data systems
are complete. Even after this work is completed, however, the agency
has no plans to distribute HMO-specific information directly to
beneficiaries or ensure that they know such information is available.
Thus, although HHS stated that one of HCFA's highest priorities is
that beneficiaries "receive timely, accurate, and useful information
about Medicare," HCFA has no plans to ensure that beneficiaries
interested in HMOs receive any comparative information.
DISENROLLMENT ANALYSIS METHODOLOGY
=========================================================== Appendix I
We analyzed and reported\27 disenrollment rates for all Medicare risk
HMOs operating in the Los Angeles and Miami areas in 1995.\28 We
selected these two cities because (1) they have large numbers of both
Medicare HMOs and enrollees and (2) Los Angeles and Miami are located
in different HCFA regions (HCFA Region IX monitors Los Angeles HMOs,
HCFA Region IV monitors Miami HMOs). Of all beneficiary applications
submitted to Medicare risk HMOs nationwide in 1995, approximately 26
percent were submitted to HMOs in Los Angeles and Miami. At the end
of 1995, Medicare HMO enrollees in these two metropolitan areas
represented 32 percent of all Medicare HMO enrollees.\29
--------------------
\27 Although not reported, our preliminary analysis of several other
major markets (Boston, Chicago, Denver, Minneapolis, Philadelphia,
San Francisco, and Seattle) showed substantial variation in
disenrollment rates--some as wide as those found in Los Angeles and
Miami.
\28 One plan, California Care, was excluded from our analysis because
it had less than 100 members during most of 1995.
\29 The Humana Medical Plan contract service area extends beyond the
Miami market area. Because of data limitations, we could not compute
Humana's voluntary disenrollments separately for the Miami area.
Thus, the disenrollment rates reported for Humana reflect average
beneficiary behavior for its entire Florida contract. Had we been
able to isolate disenrollment in Miami from the rest of Humana's
contract area, our analysis would have covered 29 percent, instead of
32 percent, of all Medicare HMO enrollees.
DATA SOURCES
--------------------------------------------------------- Appendix I:1
We used data from HCFA's Managed Care Option Information (McCoy)
System and the enrollment and cancellation files. The Data
Development and Support Team (DDST) in HCFA's Office of Managed Care
helped us gain access to these data. (DDST manages Medicare HMO
enrollment/
disenrollment data and calculates payment for risk HMOs.)
ANNUAL DISENROLLMENT RATES
--------------------------------------------------------- Appendix I:2
We used quarterly profiles from the McCoy System, an online database
used by HCFA staff to update beneficiary information and generate
reports on Medicare HMOs, to obtain the number of each HMO's total
disenrollments for each quarter in 1995. Because data on the number
of disenrollments due to death and loss of eligibility were only
available on a monthly basis, we used McCoy monthly disenrollment
rate reports to compute the total number of deaths and loss of
eligibility in each quarter. We then subtracted quarterly deaths and
loss of eligibility from quarterly total disenrollment to obtain
quarterly voluntary disenrollment:
voluntary disenrollment for quarter Qi =
(total disenrollment in Qi - death and ineligibles in Qi)
where i = 1 to 4
We computed quarterly average HMO Medicare membership by adding the
ending membership of the previous quarter to the ending membership of
the current quarter and dividing by 2:
average membership for quarter Qi =
[(ending membership in Qi-1 + ending membership in Qi)/2]
We then calculated the quarterly disenrollment rate by dividing the
average membership into the voluntary disenrollments for the current
quarter:
disenrollment rate for quarter Qi =
(voluntary disenrollment for quarter Qi/average membership for
quarter Qi)
Finally, we added the rates from each of the four quarters together
to determine the total annual disenrollment rate for 1995:
total annual disenrollment rate = (sum of disenrollment rates
for Q1 through Q4)
CANCELLATION AND RAPID
DISENROLLMENT RATES
--------------------------------------------------------- Appendix I:3
To determine the number of 1995 applicants who canceled or
disenrolled within 3 months, we first identified Medicare
beneficiaries who applied to HMOs in 1995. Using the enrollment and
cancellation files, we identified which beneficiaries canceled their
applications or disenrolled within 3 months. We excluded
beneficiaries who died or lost their eligibility. We then calculated
the percentage of applicants who canceled or disenrolled within 3
months:
Percentage of applicants who canceled or disenrolled within 3
months =
[(cancellations + (disenrollments within 3 months) - (deaths and
ineligibles within 3 months)]/ (1995 applicants - deaths and
ineligibles)
We conducted our review of disenrollment data between March and
August 1996 on the basis of data extracted from HCFA's databases
during April and May of 1996 and in accordance with generally
accepted government auditing standards.
MIAMI AND LOS ANGELES HMO MARKET
SHARES
========================================================== Appendix II
Figure II.1: Miami HMO Market
Shares
(See figure in printed
edition.)
Note: The section of the pie chart labeled "Other" consists of three
plans with 3 percent or less of the Miami Medicare risk market: (1)
HIP, with 8,154 members or 3.08 percent of the market; (2)
Prudential, with 6,927 members or 2.62 percent of the market; and (3)
Neighborhood, with 1,325 members or .50 percent of the market. The
total number of members in each plan is as of December 31, 1995, from
HCFA McCoy Profile Reports processed on April 22, 1996.
Figure II.2: Los Angeles HMO
Market Shares
(See figure in printed
edition.)
Note: The section of the pie chart labeled "Other" consists of eight
plans with less than 2 percent of the Los Angeles Medicare risk
market: (1) Inter Valley, with 13,574 members or 1.62 percent of the
market; (2) Watts, with 12,753 members or 1.53 percent of the market;
(3) Cigna, with 10,822 members or 1.29 percent of the market; (4)
Foundation, with 8,572 members or 1.03 of the market; (5) Scan, with
8,402 or 1.01 percent of the market; (6) Maxicare, with 2,231 or .27
percent of the market; (7) Prudential, with 1,920 members or .23
percent of the market; and (8) CaliforniaCare, with 380 members or
.05 percent of the market. The total number of members in each plan
is as of December 31, 1995, from HCFA McCoy Profile Reports processed
on April 22, 1996.
(See figure in printed edition.)Appendix III
COMMENTS FROM THE DEPARTMENT OF
HEALTH AND HUMAN SERVICES
========================================================== Appendix II
(See figure in printed edition.)
(See figure in printed edition.)
(See figure in printed edition.)
(See figure in printed edition.)
(See figure in printed edition.)
(See figure in printed edition.)
MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix IV
James C. Cosgrove, Assistant Director, (202) 512-7029
Charles A. Walter, Project Manager, (202) 512-4337
Marie E. Cushing, Deputy Project Manager
George M. Duncan, Senior Evaluator-Data Analysis
Wayne J. Turowski, Senior Computer Specialist
Patricia A. Davis, Senior Social Science Analyst
Hannah F. Fein, Technical Writer
RELATED GAO REPORTS
============================================================ Chapter 1
Medicare HMOs: Rapid Enrollment Growth Concentrated in Selected
States (GAO/HEHS-96-63, Jan. 18, 1996).
Health Care: Employers and Individual Consumers Want Additional
Information on Quality (GAO/HEHS-95-201, Sept. 29, 1995).
Medicare: Increased HMO Oversight Could Improve Quality and Access
to Care (GAO/HEHS-95-155, Aug. 3, 1995).
Medicare: Opportunities Are Available to Apply Managed Care
Strategies (GAO/T-HEHS-95-81, Feb. 10, 1995).
Health Care: Employers Urge Hospitals to Battle Costs Using
Performance Data Systems (GAO/HEHS-95-1, Oct. 3, 1994).
Health Care Reform: "Report Cards" Are Useful but Significant Issues
Need to Be Addressed (GAO/HEHS-94-219, Sept. 29, 1994).
Medicare: HCFA Needs to Take Stronger Actions Against HMOS Violating
Federal Standards (GAO/HRD-92-11, Nov. 12, 1991).
Long-Term Care Insurance: Risks to Consumers Should Be Reduced
(GAO/T-HRD-91-14, Apr. 11, 1991).
Medicare: PRO Review Does Not Assure Quality of Care Provided by
Risk HMOs (GAO/HRD-91-48, Mar. 13, 1991).
Medigap Insurance: Better Consumer Protection Should Result From
1990 Changes to Baucus Amendment (GAO/HRD-91-49, Mar. 5, 1991).
Medicare: Experience Shows Ways to Improve Oversight of Health
Maintenance Organizations (GAO/HRD-88-73, Aug. 17, 1988).
Federal Employees Need Better Information for Selecting a Health Plan
(MWD-76-83, Jan. 26, 1976).
*** End of document. ***