HCFA less sure it'll try Medicare HMO bids here 'We're looking at other sites as well'

September 21, 1996|By M. William Salganik | M. William Salganik,SUN STAFF

The federal Health Care Financing Administration has backed off a little from plans to conduct a test in the Baltimore market of competitive bidding for Medicare HMOs -- a test opposed by local HMOs and the Maryland congressional delegation.

"We're still consulting with people, and it is not clear what, if anything, we are going to do in Baltimore," Barbara S. Cooper, HCFA deputy associate administrator for policy, said yesterday.

Earlier, HCFA had said it might change the timing or details of the test, but still intended to proceed.

"We're looking at other sites as well," Cooper said, adding that HCFA had always hoped to test new reimbursement models in at least three markets, so consideration of other cities did not mean HCFA had given up on Baltimore.

Currently, several HMOs are marketing energetically to sign up seniors. Those who enroll pay no monthly fee beyond Medicare Part B premiums, and receive some coverage, such as pharmacy and vision benefits, not included in normal Medicare or in many "Medigap" supplemental policies.

HCFA pays the HMO a monthly fee equal to 95 percent of the average cost for fee-for-service Medicare enrollees. HCFA studies suggest that the actual cost might be lower, so it wanted to see if competitive bidding could bring reimbursements down. HMOs who bid above the cost level selected by HCFA could still enroll seniors, but would have to charge them an additional premium.

Martha C. Roach, executive director of the Maryland Association of Health Maintenance Organizations, said HMOs believed that the terms of the the experiment meant that a majority of seniors "would be asked to pay a premium for reduced benefits." And enrollees would probably leave an HMO that started charging a premium, she said, bringing disruptions in care.

Cooper said HCFA is concerned that its experiment, slated to begin early next year, would come at the same time that the state is moving all Medicaid recipients into HMOs or similar managed-care health plans, "which could be difficult for the plans and confusing for beneficiaries."

She said there was no set time frame for making a final decision on whether to go ahead with the Baltimore demonstration

project.

Pub Date: 9/21/96

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