Medicare and HMOs
The recent years of high health care inflation combined with the Congressional drive to reduce federal deficits have created changes in the operating structure of Medicare. One of the most significant, the growth of the Medicare managed care program, first started in 1994.
Previously, all Medicare covered services were delivered on a "fee for service" basis. The patient picked a Medicare doctor, and went for services as needed. If she went for care, the doctor was paid for the care provided; if she never went to the doctor, no Medicare bills occurred. Under this fee for service arrangement, after an annual deductible, Medicare paid 100% of covered services for Part A, and 80% of the allowed charge for Part B.
In the managed care world, the patient picks a doctor (or set of doctors) by signing up with a specific plan or group where the doctor practices. The plan gets paid a set price when the patient enrolls with the plan. The doctor will not be paid for each patient visit, so it's best for the doctor to keep the patient as well as possible, and have as few medical expenses as possible. If the patient never visits the doctor, or goes weekly, the doctor is paid the same.
Because the doctor was paid for the medical care when the patient enrolled with the plan, Medicare won't pay for health care provided by any other doctor than in the plan originally picked. Care provided at an emergency room, outpatient clinic, etc. is not covered unless first approved by the managed care provider.
Medicare beneficiaries who choose to receive Medicare coverage through HMOs may have the advantage of broader coverage than is available under traditional fee for services Medicare. In a Medicare HMO, you might receive coverage for preventative services such as annual physicals, immunizations, gynecological exams and office visits. With a Medicare HMO, the paperwork for reimbursement is greatly reduced as well. Medicare HMOs are not widely available in Michigan.
When deciding whether a Medicare HMO is a smart choice for you, keep in mind these questions and pointers:
- Do you use preventive health care more than other emergency or remedial care? Do you see your primary doctor more than specialists? Studies of Medicare beneficiaries enrolling in HMOs show that those who join a HMO typically spend only 2/3 as many days in the hospital as their peers -- they are healthier, and use primary care, not acute care. The studies also show that beneficiaries who drop out of HMOs spend twice as much time in the hospital as the Medicare average.
- Is your current doctor participating in an HMO, and if not, do you mind changing doctors?
- If your primary doctor is a member of the HMO plan, are most of your specialists also included? Again, if they are not, are you willing to change to new HMO specialists?
- What is the potential risk of less aggressive treatment for your health needs? The purpose of managed care is to restructure health care so less expensive services such as preventive care is used instead of more expensive tests and treatments. Is this the right health care for you?
- Why are you picking the particular HMO? What do you know about it? Is it the advertising that attracts you or some other recommendation? What hospitals does it use? What is the HMO's track record? Have you talked with anyone using it?
- Can you get out of this HMO if you change your decision? When and how? As of 2006, you may leave an HMO (called a Medicare Advantage Plan) at any time for any reason.
- Do you know what the appeal procedure is if you have been denied services, including tests or procedures by specialists, and how long the appeal may take? Under state law requirements, all Michigan HMOs are to have an internal grievance procedure in place that tells you (in writing):
- about an adverse decision and the reasons for it;
- how you can challenge the adverse decision;
- that a final decision will be made within 90 days of your formal grievance; and
- an initial response will be made within 72 hours of an expedited grievance being filed.
