Medicare Managed Care: Program Growth Highlights Need to Fix HMO Payment Problems

United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office Health, Education, and Human Services Division author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 1995-05-24 monographic deposited born digital GA 1.13:T-HEHS-95-174 https://www.govinfo.gov/app/details/GAOREPORTS-T-HEHS-95-174 P0b002ee1803a2df1 f:the95174 DGPO 2010-08-12 2011-03-24 GAOREPORTS-T-HEHS-95-174 machine generated eng fdlp REPORT GAOREPORTS-T-HEHS-95-174 T-HEHS-95-174 Health care cost control Health maintenance organizations Medicare programs Beneficiaries Medical services rates Payments Medical economic analysis Risk management Price adjustments Arizona CalPERS Health Benefits Program (CA) Medicare Risk Contract Program California Testimony HEHS Medicare Managed Care: Program Growth Highlights Need to Fix HMO Payment Problems Rapid growth in the number of Medicare beneficiaries enrolled in health maintenance organizations (HMO) increases the urgency of correcting rate-setting flaws that undermine the cost-saving potential of managed care for Medicare. Medicare has paid HMOs much more than it would have paid traditionally more expensive fee-for-service providers. Two lessons can be learned from GAO's review of ways to fix Medicare's HMO capitation payments. First, a multipronged approach to rate setting makes sense. The large disparities in market conditions between states--from California to Maine--call for solutions keyed to market conditions. Second, with respect to achieving the promise of such initiatives, details matter. How these strategies are designed and implemented could mean the difference between success and failure. GAO believes that in the short term, the Health Care Financing Administration (HCFA) can overcome its capitation rate problem by introducing a better health status risk adjuster. HCFA should also promptly test competitive bidding and other promising approaches to setting HMO rates that reduce Medicare costs. https://www.govinfo.gov/content/pkg/GAOREPORTS-T-HEHS-95-174/html/GAOREPORTS-T-HEHS-95-174.htm GAO/T-HEHS-95-174 https://www.govinfo.gov/app/details/GAOREPORTS-T-HEHS-95-174 Testimony GAO/T-HEHS-95-174; Medicare Managed Care: Program Growth Highlights Need to Fix HMO Payment Problems; Health care cost control Health maintenance organizations Medicare programs Beneficiaries Medical services rates Payments Medical economic analysis Risk management Price adjustments Arizona CalPERS Health Benefits Program (CA) Medicare Risk Contract Program California