Merritt Personal Lines Manual: One Alternative: Medicare HMOs
In October 1998, the Health Care Financing Administration sent information to 38 million Medicare beneficiaries in five pilot states, consisting of a comprehensive handbook entitled Medicare and You. (Medicare beneficiaries in the other 45 states received a briefer version of the handbook.)
The purpose of the handbook was to clarify options under the Medicare+Choice managed care plan. In the early 2000s, Medicare+Choice was renamed MedicareAdvantage - though the program remains essentially the same.
When managed care was first introduced to consumers, it was widely agreed that the only way to convince reluctant people to try a new HMO plan was to give them enough information so they would feel comfortable choosing a physician and using the plan appropriately, thereby reducing their own out-of-pocket costs.
The issue became even more urgent when applied to retirees and the potentially bewildering array of Medicare+Choice options available to them. Added to the mix is the reality that many seniors, especially those who retired before managed care became a household word, were uninformed about and unaccustomed to managed care plans.
The Medicare and You handbook included:
- generic Medicare information, including eligibility Medicare basics (what's covered, what's not and the out-of-pocket expenses associated with original Medicare);
- new preventive services covered under Medicare;
- an overview of all types of Medicare+Choice options and points to consider when making a decision;
- enrolling and disenrolling information and procedures;
- phone numbers by state for answers to questions;
- information about Medigap policies; and
- a worksheet for comparing various Medicare and Medigap health plans.
Also included in the handbook: a geographically personalized insert, based on the individual's ZIP code, of the Medicare+Choice plans available - including benefit plan designs, supplemental benefits, cost and quality measure comparisons.
For its part, HCFA learned many lessons during the 1990s about the challenges associated with communicating complicated managed care rules and regulations to an unsophisticated elderly population. Countless enrollees on fixed incomes have confronted the daunting prospect of paying out of pocket for medically unnecessary care or treatment received without proper referrals. (Medicare HMOs have not been shy about denying payment when rules and procedures are violated.)
Some health plans have adopted compassionate procedures that permit payment for first-time noncompliant offenses. But other health plans are not so understanding.
The result can be devastating. When a health plan decides to deny coverage for a medically unnecessary hospital emergency room visit, the enrollee may be financially responsible for $1,000 or more in billings.
Even the most comprehensive, onerous disclosure regulations will never prevent misunderstandings on the part of some individuals. This is especially true for a Medicare beneficiary population that was not raised under managed care. However, the new regulations, by creating common industrywide disclosure, protect the interests of the 5.8 million current managed care enrollees and the one million new enrollees each year.
HCFA mandates that Medicare managed care plans publish clear, standardized forms to disclose a variety of programmatic aspects during initial enrollment and at least annually thereafter. Some items must be routinely disclosed to all enrollees. These items - key to how claims are paid - include:
- service area;
- number, mix and distribution of participating providers;
- out-of-network coverage;
- prior authorization and review rules;
- quality assurance program description;
- emergency coverage, including definition of "emergency;"
- supplemental benefits (mandatory and optional) with related premiums;
- grievances organization determinations and appeals;
- inpatient hospital treatment; and
- disenrollment rights and responsibilities.
Other items are usually disclosed to consumers only when requested. These - which are also both important to understanding how the plan will pay claims - items include:
- utilization management procedures; and
- a physician compensation plan.
We will consider each of these items in detail through the remainder of this section.
Caveat: Once you enroll in a Medicare HMO you can switch back to Medicare anytime. However, you may not switch back to a Medicare Supplement policy you previously had without the company's permission. And, you can be sure they will review your health record if you do and possibly turn you down. That's why some seniors hang on to their Medicare Supplement policy while enrolled in an HMO, just to make sure they are happy with it. This guarantees continuous coverage under the supplement if they change their mind and go back to traditional Medicare service.
