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Date: Monday, November 27, 1995 FOR IMMEDIATE RELEASE Contact: HCFA Press Office (202) 690-6145
Under Medicare Choices, beneficiaries will be able to join a variety of types of managed care plans not now eligible to participate in Medicare, such as provider-sponsored networks and preferred provider organizations. HCFA also will experiment with alternative payment methods, such as partial capitation and risk adjustment.
"This new effort will continue the historic progress toward ensuring every Medicare beneficiary the maximum choice of health plans," said HHS Secretary Donna E. Shalala. "In the last two years, the number of Medicare beneficiaries enrolled in managed care has increased by 25 percent. Today, an average of 70,000 beneficiaries enroll in a managed care plan every month."
Medicare beneficiaries can presently obtain managed care through health maintenance organizations, and 271 HMOs nationwide participate in the Medicare program. About 74 percent of beneficiaries have at least one HMO option available in their area, and 56 percent have a choice of two or more plans from which to choose.
Currently, some 3.7 million Medicare beneficiaries (over 10 percent of all Medicare beneficiaries) are enrolled in HMOs, compared with 2.2 million in 1992. Medicare enrollment in HMO plans is presently increasing at a an annual rate of about 30 percent.
In response to a HCFA solicitation earlier this year, nearly 400 managed care plans in 47 States and the District of Columbia expressed interest in participating in the new Choices demonstration.
After a rigorous review of each application, HCFA has asked 52 plans to submit final applications by mid-December. Most of the finalists are in seven targeted market areas that currently have limited Medicare enrollment in managed care. The areas were selected because of their potential for expanding beneficiary choices based on available private-sector options.
The seven market areas are Sacramento, Calif.; Atlanta, Ga.; Jacksonville, Fla.; New Orleans, La.; Columbus, Ohio; Philadelphia, Pa.; and Houston, Texas.
The finalists include nine plans that operate in rural areas. In general, beneficiaries in rural areas have limited access to managed care plans. The Choices demonstration is expected to bring provider-sponsored networks and other innovative arrangements to rural areas as alternatives to fee-for-service.
"We are excited about the overwhelming initial response to this innovative demonstration," said HCFA Administrator Bruce C. Vladeck. "Results will help reshape Medicare's managed care options and improve how Medicare pays managed care plans."
The final awards are expected to be announced in early 1996. The demonstration, which is expected to operate from three to five years, was designed and will be conducted by HCFA's Office of Research and Demonstrations.
Finalists are: