Medicare Managed Care: Information Standards Would Help Beneficiaries
Make More Informed Health Plan Choices (Testimony, 05/06/98,
GAO/T-HEHS-98-162).
Pursuant to a congressional request, GAO discussed the extent to which
the Health Care Financing Administration's (HCFA) Medicare Choice
information development efforts are likely to: (1) enable beneficiaries
to readily compare benefits and out-of-pocket costs using plan
brochures; and (2) facilitate the agency's approval of plans' marketing
materials and other administrative work required of both HCFA and the
health plans.
GAO noted that: (1) HCFA has begun making certain plan-specific
information available to beneficiaries; (2) these efforts, however, do
not address the problem beneficiaries face in trying to carefully
evaluate their health plan choices using the plans' summaries of
benefits and other marketing materials; (3) these materials are a major
source of health plan information; (4) currently, plans use widely
varied formats and definitions of benefits in the materials they
distribute to beneficiaries; (5) this lack of common formatting and
language made it difficult, if not impossible, for beneficiaries to rely
on HMOs' marketing literature to compare benefits and premiums; (6)
preliminary results from GAO's current work on HMOs' prescription drug
benefit suggest this situation continues to exist; (7) GAO's current
work also suggests that critical information is sometimes missing from
plans' marketing materials; (8) the diverse formats and terms also cause
problems for health plans and HCFA staff; (9) without HCFA's specifying
common standards for plans' marketing materials, agency staff have wide
discretion when deciding to approve or reject these documents; (10) plan
representatives and HCFA staff stated that this latitude leads to
inconsistent HCFA decisions, unnecessary delays, and extra costs; (11)
the lack of required standards similarly affects the efficient
development of comparative benefits information; (12) to help
beneficiaries evaluate their health plan options, HCFA could move faster
to publish readily available plan performance indicators such as plans'
disenrollment rates; (13) with this information, beneficiaries could
then decide to seek more information about a plan before enrolling; (14)
HCFA could better serve beneficiaries, reduce burdens on health plans,
and leverage its own resources by setting information standards for
health plans' marketing literature; (15) GAO believes, therefore, that
HCFA should adopt the recommendations it made in 1996 and require plans
to use standard formats and terminology in their benefit descriptions;
and (16) in addition, HCFA should use plan performance data it already
collects to help inform beneficiaries' health plan decisions.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: T-HEHS-98-162
TITLE: Medicare Managed Care: Information Standards Would Help
Beneficiaries Make More Informed Health Plan Choices
DATE: 05/06/98
SUBJECT: Health care programs
Health maintenance organizations
Health services administration
Marketing
Beneficiaries
Information disclosure
Comparative analysis
IDENTIFIER: Medicare Choice Program
Medicare Program
Federal Employees Health Benefits Program
HCFA Consumer Assessments of Health Plans Study
******************************************************************
** This file contains an ASCII representation of the text of a **
** GAO report. Delineations within the text indicating chapter **
** titles, headings, and bullets are preserved. Major **
** divisions and subdivisions of the text, such as Chapters, **
** Sections, and Appendixes, are identified by double and **
** single lines. The numbers on the right end of these lines **
** indicate the position of each of the subsections in the **
** document outline. These numbers do NOT correspond with the **
** page numbers of the printed product. **
** **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced. Tables are included, but **
** may not resemble those in the printed version. **
** **
** Please see the PDF (Portable Document Format) file, when **
** available, for a complete electronic file of the printed **
** document's contents. **
** **
** A printed copy of this report may be obtained from the GAO **
** Document Distribution Center. For further details, please **
** send an e-mail message to: **
** **
** **
** **
** with the message 'info' in the body. **
******************************************************************
Cover
================================================================ COVER
Before the Special Committee on Aging, U.S. Senate
For Release on Delivery
Expected at 2:00 p.m.
Wednesday, May 6, 1998
MEDICARE MANAGED CARE -
INFORMATION STANDARDS WOULD HELP
BENEFICIARIES MAKE MORE INFORMED
HEALTH PLAN CHOICES
Statement of William J. Scanlon, Director
Health Financing and Systems Issues
Health, Education, and Human Services Division
GAO/T-HEHS-98-162
GAO/HEHS-98-162T
(101721)
Abbreviations
=============================================================== ABBREV
AWP - average wholesale price
BBA - Balanced Budget Act of 1997
CBS - Center for Beneficiary Services
CHPP - Center for Health Plans and Providers
FEHBP - Federal Employees Health Benefits Program
HCFA - Health Care Financing Administration
HMO - health maintenance organization
MEDICARE MANAGED CARE:
INFORMATION STANDARDS WOULD HELP
BENEFICIARIES MAKE MORE INFORMED
HEALTH PLAN CHOICES
============================================================ Chapter 0
Mr. Chairman and Members of the Committee:
We are pleased to be here today to discuss steps the Health Care
Financing Administration (HCFA) could take to help beneficiaries make
more informed choices among Medicare health plans. In 1996\1 we
reported to you that beneficiaries received little or no comparative
information on Medicare health maintenance organizations (HMO).
Among other things, we recommended that HCFA produce plan comparison
charts, require plans to use standard formats and terminology in key
aspects of their marketing materials, and publicize readily available
plan performance indicators such as disenrollment rates. In
addition, Medicare+Choice provisions under the Balanced Budget Act of
1997\2 (BBA) authorize new health plan options for Medicare
beneficiaries and mandate that HCFA provide beneficiaries with
comparative information about the Medicare+Choice options.
My remarks today will focus on the extent to which HCFA's
Medicare+Choice information development efforts are likely to (1)
enable beneficiaries to readily compare benefits and out-of-pocket
costs using plan brochures and (2) facilitate the agency's approval
of plans' marketing materials and other administrative work required
of both HCFA and the health plans. I am basing these remarks on our
ongoing work for this Committee. I will also discuss the findings
from our recent report\3 on HMO disenrollment rates and how data that
HCFA already collects, but does not publish, may be useful to
beneficiaries.
In summary, HCFA has begun making certain plan-specific information
available to beneficiaries. For example, in March of this year, HCFA
posted summary information on health plans' premiums, out-of-pocket
costs, and benefits on the Internet. HCFA is also working to provide
a printed version of this information directly to beneficiaries and
meet other BBA information dissemination requirements.
These efforts, however, do not address the problem beneficiaries face
in trying to carefully evaluate their health plan choices using the
plans' summaries of benefits and other marketing materials. These
materials are a major source of health plan information. Currently,
plans use widely varied formats and definitions of benefits in the
materials they distribute to beneficiaries. As we reported in 1996,
this lack of common formatting and language made it difficult, if not
impossible, for beneficiaries to rely on HMOs' marketing literature
to compare benefits and premiums. Preliminary results from our
current work on HMOs' prescription drug benefit--a benefit that
attracts many Medicare beneficiaries to managed care--suggest this
situation continues to exist. Our current work also suggests that
critical information is sometimes missing from plans' marketing
materials.
The diverse formats and terms also cause problems for health plans
and HCFA staff. Without HCFA's specifying common standards for
plans' marketing materials, agency staff have wide discretion when
deciding to approve or reject these documents. Plan representatives
and HCFA staff we spoke with said that this latitude leads to
inconsistent HCFA decisions, unnecessary delays, and extra costs.
The lack of required standards similarly affects the efficient
development of comparative benefits information. Under current
circumstances, agency staff must comb through dissimilar information
submitted by plans for HCFA's contract approval process and contact
the plans to clarify the information before producing benefit
comparison summary charts.
To help beneficiaries evaluate their health plan options, HCFA could
move faster to publish readily available plan performance indicators
such as plans' disenrollment rates. With this information,
beneficiaries could then decide to seek more information about a plan
before enrolling.
HCFA could better serve beneficiaries, reduce burdens on health
plans, and leverage its own resources by setting information
standards for health plans' marketing literature. We believe,
therefore, that HCFA should adopt the recommendations we made in 1996
and require plans to use standard formats and terminology in their
benefit descriptions. In addition, HCFA should use plan performance
data it already collects to help inform beneficiaries' health plan
decisions.
--------------------
\1 Medicare: HCFA Should Release Data to Aid Consumers, Prompt
Better HMO Performance (GAO/HEHS-97-23, Oct. 22, 1996).
\2 P.L. 105-33.
\3 Medicare: Many HMOs Experience High Rates of Beneficiary
Disenrollment (GAO/HEHS-98-142, May 1, 1998).
BACKGROUND
---------------------------------------------------------- Chapter 0:1
Most beneficiaries live in areas where they can choose to receive
Medicare benefits either through a managed care plan or through
traditional fee-for-
service Medicare. Of the 6 million beneficiaries enrolled in
Medicare managed care, approximately 90 percent are in
"risk-contract" HMOs.\4 Medicare pays these HMOs a fixed, per
beneficiary fee, regardless of what the HMO spends for each
beneficiary's health care. These plans are called "risk" HMOs
because the HMO assumes the financial risk of providing care for the
amount Medicare pays.
Although HMOs are required to cover all traditional Medicare
benefits, many also provide additional services, such as outpatient
prescription drugs, routine physical examinations, and hearing aids.
In addition, plan costs can vary: some HMOs charge a monthly premium
(in addition to Medicare's part B premium), but others do not.
Except for emergency services, HMO enrollees must generally receive
all covered care through health care professionals designated by
their plans.
The number of Medicare beneficiaries enrolled in risk HMOs has more
than doubled in the last 3 years, from 2.3 million in December 1994
to 5.2 million in December 1997. The number of Medicare risk HMOs
also increased, from 154 to 307, in the same time period. The growth
in Medicare managed care enrollees and plans is expected to continue,
fueled in part by the BBA, which provided for new types of Medicare
managed care plans and increased plan payments in many areas that
previously lacked a fee-for-service alternative.
Unlike other large health care purchasing organizations, HCFA has not
routinely provided plan-specific information directly to
beneficiaries. However, the BBA now requires HCFA to distribute
comparative information that can help beneficiaries interested in
managed care select a health plan. In addition, HMOs will continue
to advertise and distribute summaries of benefits as part of their
marketing efforts to enroll new members.
HCFA, through its regional offices, approves the HMOs' marketing
materials before plans use them. HCFA regional offices also oversee
HMO marketing and enrollment efforts by reviewing plans' sales
practices and responding to beneficiaries' complaints. HMOs must
include certain explanations in their marketing materials, such as
provider restrictions, but otherwise have wide latitude in what
information is included and how it is presented.
Each year, as part of the contracting process, HMOs submit to HCFA
detailed information on their proposed benefits, premiums, and other
beneficiary out-of-pocket costs. HCFA's central office reviews these
proposals for compliance with Medicare regulations and approves the
contracts.
--------------------
\4 Approximately 700,000 beneficiaries are enrolled in HMOs that are
reimbursed by HCFA on a cost basis or in another form of managed
care.
STANDARD BENEFIT DESCRIPTIONS
COULD HELP BENEFICIARIES
COMPARE PLANS' BENEFITS AND
EASE BURDEN ON PLANS AND AGENCY
STAFF
---------------------------------------------------------- Chapter 0:2
Although HCFA has efforts under way to publish comparative
information on Medicare+Choice plans, it has not taken the steps
needed to enable beneficiaries to make similar comparisons using
individual plans' marketing materials. The absence of standards for
format and terminology used to describe benefits and out-of-pocket
costs limits the usefulness of these materials for comparison
purposes. Such standardization would help beneficiaries in comparing
health plans and lessen the administrative burden on both HCFA and
the plans. Extending these standards to the information that plans
provide to HCFA in their contract submissions would facilitate the
agency's efforts to assemble comparative information.
HCFA HAS EFFORTS UNDER WAY
TO DISSEMINATE INFORMATION
ON MEDICARE+CHOICE PLANS
-------------------------------------------------------- Chapter 0:2.1
Until this year, HCFA produced little comparative information on
Medicare HMOs. In March 1998, HCFA made available a database it
calls "Medicare Compare," which posts summary information on the
Internet comparing health plans' benefits and out-of-pocket costs.
HCFA intends to update the database and add plan performance
indicators as they become available in the coming months and years.
In addition, HCFA plans to include comparison charts in the next
Medicare Handbook to be mailed to beneficiaries. Agency staff are
also conferring with seniors' advocacy groups to determine how best
to inform beneficiaries of their new Medicare+Choice options.
LACK OF STANDARD FORMAT AND
TERMINOLOGY IN MARKETING
MATERIALS HINDERS READY
COMPARISON OF PLANS'
BENEFITS AND COSTS
-------------------------------------------------------- Chapter 0:2.2
Federal employees and retirees can readily compare benefits among
health plans in the Federal Employees Health Benefits Program (FEHBP)
because the Office of Personnel Management, which administers FEHBP,
requires plan brochures to follow a common format and use standard
terminology. In contrast, HCFA does not require Medicare HMOs to use
standardized formats or terms, including definitions, in their
marketing materials. Consequently, Medicare beneficiaries cannot
easily use plans' marketing materials to compare benefit packages.
Neither HCFA's Medicare HMO/Competitive Medical Plan (HMO/CMP) Manual
nor its supplemental Medicare Managed Care National Marketing Guide
requires standardization in plan materials. In fact, the manual,
which provides guidance on the contents of plans' marketing materials
and HCFA's process for reviewing these materials, specifically
states, "HCFA does not mandate a format or style for . . .
marketing materials other than requiring that the member rules be
written and that the marketing materials . . . be understandable
to the average beneficiary." HCFA's marketing guidelines do contain
model language and documents HMOs can adopt, but plans are not
required to use the models. Without required standards from HCFA,
HMOs are left to their individual discretion, as we reported in 1996.
We recently asked the eight Medicare HMOs serving the Tampa, Florida,
area to send us their marketing materials. We received a wide array
of brochures, pamphlets, and other written documents. Although all
plans provided benefit summaries, the formats and benefit categories
varied considerably from plan to plan. This lack of consistency may
impair a beneficiary's ability to compare benefits and related costs.
For example, we found that only five Tampa plans mention mammograms
in their benefit summaries--even though all plans covered mammograms.
Most plans listed mammograms under the benefit category of preventive
services. One plan, however, listed mammograms under hospital
outpatient services. Consistent presentation is important because
beneficiaries may rely on plans' benefit summaries for coverage and
out-of-pocket cost information. Beneficiaries typically do not
receive more detailed benefit descriptions until after they enroll in
a plan.
The HMOs we reviewed also differed in the terms they used to describe
the same benefit. Some plans used technical terms but did not define
them. Consequently, beneficiaries could misinterpret important
out-of-pocket costs or benefit restrictions. For example, some plans
used the term "formulary"\5 in describing their drug benefit but did
not explain what it meant. Beneficiaries reading a plan's marketing
materials may not understand that use of nonformulary drugs may
result in substantially higher out-of-pocket costs. To learn what
"formulary" means when it is not defined in the marketing literature,
beneficiaries would have to ask plan representatives or read the
plan's "evidence of coverage"--a document normally provided to
beneficiaries after they enroll in a plan.
--------------------
\5 In general, a formulary is a list of drugs that health plans
prefer their physicians to use in prescribing drugs for enrollees.
The formulary includes drugs that plans have determined to be
effective and that suppliers may have favorably priced for the plan.
LACK OF STANDARDS FOR
MARKETING MATERIALS CAN
RESULT IN MISLEADING
COMPARISONS
-------------------------------------------------------- Chapter 0:2.3
Seemingly straightforward benefit comparisons may be misleading
because plans' marketing materials sometimes omit key details. Plan
descriptions of prescription drug coverage, a benefit offered by many
HMOs, illustrate how missing information can lead to erroneous
conclusions about the value of plans' benefits.
Under the best of circumstances, the relative value of plans'
prescription drug coverage may be hard to compare. For example,
plans that have formularies often set one copayment amount for
formulary drugs and another, higher copayment for nonformulary drugs.
Beneficiaries' out-of-pocket costs for such plans depend both on the
specific drugs included in the formularies and the two copayment
amounts.
Beneficiaries may use a plan's stated annual dollar limit, or cap, to
judge the drug benefit's consumer value. For example, beneficiaries
may assume that an HMO offering prescription drug coverage up to a
$1,200 annual cap has a more generous benefit than another HMO
offering coverage up to $1,000. This comparison may be misleading,
however. Plans differ in how they calculate the dollar amount of
drugs used by beneficiaries. Some plans use retail prices to compute
this amount. Others may use drugs' average wholesale prices (AWP) or
a lower price discounted from AWP to calculate a member's total drug
usage in dollars.
One HMO gave us an illustration of how the value of a drug benefit
depends on whether drug cost is measured by retail prices, AWP, or
discounted AWP. The HMO used the drug Prilosec for the example
because it is one of the brand-name drugs most commonly prescribed
for its Medicare members. According to the plan, the retail price of
Prilosec is $123 and the AWP is $101. The HMO said it computes the
dollar amount of a member's Prilosec usage using a discounted AWP of
about $91 per prescription. If the plan used AWP, or the even higher
retail price, members would receive fewer prescriptions before
reaching the annual dollar coverage limit. The consumer value of a
drug benefit could vary substantially between two HMOs with the same
annual cap if they used different prices to compute drug usage.
In addition, HMOs' marketing materials do not always disclose key
details that beneficiaries need to make accurate comparisons. For
example, marketing materials from several Tampa HMOs did not mention
what prices plans used (that is, retail, AWP, or some price below
AWP) to compute the dollar amount of members' drug use. One-half of
the plans did not disclose that their prescription benefits involve
formularies. Similarly, plan materials often failed to inform
members that they face higher out-of-
pocket costs if they choose a brand-name drug when a generic drug is
available.
LACK OF STANDARDS SLOWS HCFA
REVIEW OF PLANS' MARKETING
MATERIALS
-------------------------------------------------------- Chapter 0:2.4
HCFA's lack of standards for benefit descriptions also complicates
HCFA's review of marketing materials and delays their distribution.
HMO officials said that HCFA's Medicare Managed Care National
Marketing Guide provides broad criteria for plan materials sent to
beneficiaries. It does little to ensure that HCFA's regional office
staff will review plans' marketing materials consistently and
uniformly nationwide--a problem we noted in 1996 when the guidelines
were being developed.
Individual HCFA staff have wide discretion in approving and rejecting
plans' marketing materials. HMOs report that this discretion leads
to inconsistent decisions and unnecessary delays in the development
and distribution of plan materials. For example, plans report that
HCFA reviewers frequently require changes to materials that were
previously approved by other HCFA reviewers. These changes may delay
printing or limit the use of materials already printed and increase
plans' costs. Plans report being particularly disturbed by
inconsistent HCFA decisions based on individual reviewers'
preferences. For example, one reviewer may require a plan to use the
term "contracting provider" instead of "participating provider," even
though both terms are approved by HCFA's marketing guidelines. The
rework caused by inconsistent reviews is time consuming and costly
for both HCFA and the plans.
HMO representatives reported that corporate purchasers often require
plans to use standard language. The HMO representatives suggested
that Medicare information standards could reduce the amount of time
HCFA and plan staff spend reviewing and reworking marketing
materials. All of the plans' representatives we spoke with said that
they would be in favor of such standards developed in conjunction
with all relevant parties.
STANDARD FORMAT AND
TERMINOLOGY IN PLANS'
CONTRACT SUBMISSIONS COULD
FACILITATE HCFA'S
DEVELOPMENT OF COMPARATIVE
INFORMATION
-------------------------------------------------------- Chapter 0:2.5
The lack of standards for benefit descriptions in plans' contract
submissions hinders HCFA's efforts to produce benefit comparison
charts and complicates the agency's reviews of plans' marketing
materials. As part of the normal Medicare contracting process, HMOs
regularly submit to HCFA detailed information on their benefit
packages. HCFA's Center for Health Plans and Providers reviews these
packages and approves plans' Medicare contracts. However, HMOs are
not required to conform to standard formats, language, or
descriptions in their contract submissions. Consequently, it is
difficult for the Center for Beneficiary Services (CBS), HCFA's new
unit responsible for providing information to beneficiaries, to
develop benefit comparison summaries from these contract submissions.
Instead, CBS has to recontact HMOs and request benefit information
for its own use. Moreover, HCFA regional offices, which must review
plans' marketing materials for accuracy, cannot easily rely on
contract submissions to confirm required premiums, copayments, and
benefits.
HCFA recognizes that the agency needs to standardize the information
that plans submit for contract approval. HCFA staff said this would
reduce the administrative burden on health plans and the agency. It
addition, the agency could more readily produce comparison charts and
check HMOs' marketing materials for accuracy. According to HCFA
staff, the agency has a group working on revising the contract
approval process. Implementation of new contract information
requirements, however, is targeted for 2001 or later.
ANALYSIS AND PUBLICATION OF
DISENROLLMENT RATES AND OTHER
HCFA DATA COULD AID CONSUMER
DECISION-MAKING
---------------------------------------------------------- Chapter 0:3
HCFA collects a considerable amount of data for program
administration and contractor oversight that can indicate
beneficiaries' relative satisfaction with HMOs in their market.
These indicators include statistics on beneficiary disenrollment and
complaints. Of these indicators, disenrollment rates may be most
useful to beneficiaries trying to distinguish among plans. Our
analyses, contained in our 1996 report and our most recent report,
showed that disenrollment rates vary widely among HMOs that serve the
same market. However, HCFA has not systematically analyzed or
published Medicare HMOs' disenrollment rates. Nor has HCFA yet
surveyed beneficiaries who disenrolled from HMOs to learn why some
plans have relatively high disenrollment rates.
HCFA COULD MOVE MORE QUICKLY
TO PUBLISH HMOS'
DISENROLLMENT RATES AND
OTHER PLAN PERFORMANCE
INDICATORS
-------------------------------------------------------- Chapter 0:3.1
Relative disenrollment rates may serve as broad indicators of HMO
enrollee satisfaction even though they cannot pinpoint the causes of
disenrollment. They cannot distinguish, for example, disenrollment
caused by quality or service problems from disenrollment caused by
price or value competition. Nonetheless, beneficiaries who are
considering joining a managed care plan and know relative
disenrollment rates may want to seek explanations for plans' high
disenrollment rates.
Ten years ago, we first reported that some Medicare HMOs had high
disenrollment rates.\6 In 1995, we recommended that HCFA publish
HMOs' disenrollment rates. HCFA took no action on our
recommendation, even though the agency already collects, for plan
payment purposes, the data necessary to calculate disenrollment
rates. In 1996, we reported that HMOs' disenrollment rates varied
widely in the two market areas we studied: Miami and Los Angeles.
We also restated our recommendation that HCFA publish plans'
disenrollment rates.
Our most recent report shows that many HMOs nationwide had relatively
high voluntary disenrollment rates.\7 In many markets, the highest
disenrollment rates exceeded the lowest rate by more than fourfold.
In a few markets, the range in disenrollment rates was even wider.
For example, in Houston, Texas, the highest disenrollment rate was
nearly 56 percent, while the lowest rate was 8 percent.
The BBA includes provisions requiring HCFA to publish plans'
disenrollment rates. HCFA officials told us they intend to meet that
requirement by publishing rates sometime in 1999. HCFA could act
sooner, however, to provide this information to beneficiaries.
Because HCFA already collects the necessary data, plans would not be
burdened by providing additional data. HCFA could publish
disenrollment rates this year. In fact, some HCFA regional offices
have periodically distributed these data to HMOs. Medicare HMOs
would have a strong incentive to improve their performance if HCFA
published the disenrollment rates for all plans.
Rates of complaints to HCFA from HMO enrollees can also indicate
relative satisfaction levels. Some states and large purchasers
routinely publish plan rankings based on complaint rates. This
information would be relatively simple for HCFA to compile and
publish. Although some HCFA offices track the complaints they
receive, no HCFA office publishes HMO-specific complaint rate
statistics.
--------------------
\6 Medicare: Experience Shows Ways to Improve Oversight of Health
Maintenance Organizations (GAO/HRD-88-73, Aug. 17, 1988).
\7 These rates represent voluntary disenrollment, that is, they
exclude beneficiaries who moved out of their plans' service areas,
died, or lost their Medicare part B eligibility. For a complete
description of our methodology, see GAO/HEHS-98-142, May 1, 1998,
which lists voluntary disenrollment rates for nearly every Medicare
HMO operating in 1996.
FULL ASSESSMENT OF
BENEFICIARY SATISFACTION
WITH HMOS UNAVAILABLE FOR AT
LEAST 2 YEARS
-------------------------------------------------------- Chapter 0:3.2
HCFA's initial efforts to assess beneficiaries' satisfaction with
individual Medicare HMOs may be seriously flawed. Recently, HCFA
sponsored a survey of HMO members, known as the Consumer Assessment
of Health Plans Study. HCFA intends to release the results later
this year to help beneficiaries compare the plans' ability to satisfy
their members. Shortcomings in the survey's sampling methodology,
however, will greatly limit the usefulness of the results and
preclude accurate comparisons.
The consumer assessment study includes only beneficiaries who have
remained in the same health plan for at least 12 months.
Beneficiaries who left dissatisfied or left for other reasons are
excluded. A survey of only those beneficiaries who are satisfied
enough to remain enrolled in their health plans may yield biased
results. For example, we spoke with representatives of one HMO that
conducted an annual member survey. Because the survey showed that 90
percent of its members were satisfied, HMO officials did not
understand why their plan had a 40-percent disenrollment rate. When
the HMO conducted a survey of disenrollees, however, it discovered
that many beneficiaries had left to obtain better benefits at other
HMOs.
HCFA is planning to survey Medicare HMO disenrollees in the future.
If designed appropriately, such a survey could help explain why some
HMOs have high disenrollment rates. For example, survey results may
indicate whether disenrollees left because of quality or access
problems or because competing HMOs offered more generous benefits.
The disenrollee survey instrument and methodology have not yet been
defined, and, according to HCFA staff, the results will not be
available until 2000 at the earliest.
CONCLUSIONS
---------------------------------------------------------- Chapter 0:4
HCFA faces many new responsibilities and challenges in implementing
Medicare+Choice. The success of the program depends in part on the
agency's ability to set priorities and use resources efficiently.
Although HCFA is working to produce information to help beneficiaries
compare their health plan options, the agency could leverage its
resources by setting information standards, especially for plans'
marketing materials. The benefits would accrue not only to the
beneficiaries making comparisons, but also to health plans and HCFA
staff in the review and approval of plan documents. Similarly, HCFA
could also take immediate advantage of the data it already collects
to publish such performance indicators as annual disenrollment rates.
-------------------------------------------------------- Chapter 0:4.1
Mr. Chairman, this concludes my prepared statement. I am pleased to
answer any questions you or other members of the Committee may have.
RELATED GAO PRODUCTS
Medicare: Many HMOs Experience High Rates of Beneficiary
Disenrollment (GAO/HEHS-98-142, May 1, 1998).
Medicare Managed Care: HMO Rates, Other Factors Create Uneven
Availability of Benefits (GAO/T-HEHS-97-133, May 19, 1997).
Medicare Managed Care: HCFA Missing Opportunities to Provide
Consumer Information (GAO/T-HEHS-97-109, Apr. 10, 1997).
Medicare: HCFA Should Release Data to Aid Consumers, Prompt Better
HMO Performance (GAO/HEHS-97-23, Oct. 22, 1996).
Health Care: Employers and Individual Consumers Want Additional
Information on Quality (GAO/HEHS-95-201, Sept. 29, 1995).
Medicare: Increased Oversight Could Improve Quality and Access to
Care (GAO/HEHS-95-155, Aug. 3, 1995).
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. ***