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 1997-02-27 monographic deposited born digital 12 p. GA 1.13:T-HEHS-97-82 https://www.govinfo.gov/app/details/GAOREPORTS-T-HEHS-97-82 P0b002ee18039d4c5 f:he97082t DGPO 2010-08-12 2011-03-24 GAOREPORTS-T-HEHS-97-82 machine generated eng fdlp REPORT GAOREPORTS-T-HEHS-97-82 T-HEHS-97-82 Health care programs Health insurance cost control Health maintenance organizations Statistical methods Overpayments Health care costs Medical information systems Health statistics Population statistics Medical economic analysis Medicare Program Medicare Risk Contract Program Testimony HEHS

GAO discussed the rates Medicare pays health maintenance organizations (HMO) in its risk contract program, focusing on: (1) the Health Care Financing Administration's (HCFA) method for setting HMO rates; and (2) GAO's proposed modification of HCFA's HMO rate-setting method.<p/>GAO noted that: (1) HCFA's current method of determining the county rate produces excess payments; (2) because HCFA's method excludes HMO enrollees' costs from estimates of the per-beneficiary average cost, it bases county payment rates on the average per-beneficiary cost of only those beneficiaries that remain in the fee-for-service sector and ignores the costs HMO enrollees would have incurred if they had remained in fee-for-service; (3) research has shown the costs of those remaining in fee-for-service to be higher on average than the likely costs of HMO enrollees; (4) a difficulty in correcting the problem is that HCFA cannot directly observe the costs HMO enrollees would have incurred if they had remained in the fee-for-service sector; (5) GAO's proposed modification is designed to fix that problem; (6) GAO developed a way to estimate HMO enrollees' expected fee-for-service costs using information available to HCFA; and (7) GAO's approach produces a county rate that represents the costs of all Medicare beneficiaries and could result in hundreds of millions of dollars in savings to Medicare. https://www.govinfo.gov/content/pkg/GAOREPORTS-T-HEHS-97-82/html/GAOREPORTS-T-HEHS-97-82.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-T-HEHS-97-82/pdf/GAOREPORTS-T-HEHS-97-82.pdf GAO/T-HEHS-97-82 https://www.govinfo.gov/app/details/GAOREPORTS-T-HEHS-97-82 Testimony GAO/T-HEHS-97-82; Medicare HMOs: HCFA Could Promptly Reduce Excess Payments by Improving Accuracy of County Payment Rates; Health care programs Health insurance cost control Health maintenance organizations Statistical methods Overpayments Health care costs Medical information systems Health statistics Population statistics Medical economic analysis Medicare Program Medicare Risk Contract Program Title 42 Section 1395mm(a)(4) 42 U.S.C. 1395mm(a)(4)