Impact of the BBA on medicare HMO payments for rural areas

Health Affairs

Volumn 18, Issue 1, 1999, Pages 244-254

  Schoenman, Julie A ^a  

^a Health Affairs   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; BUDGET; ECONOMICS; FEE; HEALTH MAINTENANCE ORGANIZATION; HUMAN; INFORMATION PROCESSING; LEGAL ASPECT; MEDICARE; RISK MANAGEMENT; RURAL HEALTH CARE; UNITED STATES;

BUDGETS; DATA COLLECTION; HEALTH MAINTENANCE ORGANIZATIONS; HUMANS; MEDICARE; RATE SETTING AND REVIEW; RISK SHARING, FINANCIAL; RURAL HEALTH SERVICES; UNITED STATES;

EID: 0032608322     PISSN: 02782715     EISSN: None     Source Type: Journal    
DOI: 10.1377/hlthaff.18.1.244     Document Type: Article

References (21)

1. See S. Palsbo, The Demographic Factors Explained, Research Brief no. 10 (Washington: Group Health Association of America, February 1990); S. Palsbo, The AAPCC Explained, Research Brief no. 8 (revised) (Washington: GHAA, October 1991); and S. Palsbo, The USPCC Explained, Research Brief no. 5 (revised) (Washington: GHAA, July 1992).
2. See S. Palsbo, The Demographic Factors Explained, Research Brief no. 10 (Washington: Group Health Association of America, February 1990); S. Palsbo, The AAPCC Explained, Research Brief no. 8 (revised) (Washington: GHAA, October 1991); and S. Palsbo, The USPCC Explained, Research Brief no. 5 (revised) (Washington: GHAA, July 1992).
3. See S. Palsbo, The Demographic Factors Explained, Research Brief no. 10 (Washington: Group Health Association of America, February 1990); S. Palsbo, The AAPCC Explained, Research Brief no. 8 (revised) (Washington: GHAA, October 1991); and S. Palsbo, The USPCC Explained, Research Brief no. 5 (revised) (Washington: GHAA, July 1992).
4. T. McBride, "Setting the Price for Medicare Risk Contracts in Rural Areas" (Presentation at the Robert Wood Johnson Foundation Invitational Policy Conference, Washington, D.C., 9 May 1997); Physician Payment Review Commission, Animal Report to Congress (Washington: PPRC, 1997), 59-62; and Prospective Payment Assessment Commission, Medicare and the American Health Care System: Report to the Congress (Washington: ProPAC, June 1997), 35-45.
5. T. McBride, "Setting the Price for Medicare Risk Contracts in Rural Areas" (Presentation at the Robert Wood Johnson Foundation Invitational Policy Conference, Washington, D.C., 9 May 1997); Physician Payment Review Commission, Animal Report to Congress (Washington: PPRC, 1997), 59-62; and Prospective Payment Assessment Commission, Medicare and the American Health Care System: Report to the Congress (Washington: ProPAC, June 1997), 35-45.
6. T. McBride, "Setting the Price for Medicare Risk Contracts in Rural Areas" (Presentation at the Robert Wood Johnson Foundation Invitational Policy Conference, Washington, D.C., 9 May 1997); Physician Payment Review Commission, Animal Report to Congress (Washington: PPRC, 1997), 59-62; and Prospective Payment Assessment Commission, Medicare and the American Health Care System: Report to the Congress (Washington: ProPAC, June 1997), 35-45.
7. Although lower rates are not necessarily problematic if they accurately reflect lower costs of producing services or a lower need for sendees, they are problematic if they are depressed for reasons unrelated to these factors (for example, difficulties in accessing the health care system). If Medicare expenditures in rural areas historically have been lower than would have been expected given input prices and the health status of the population, then AAPCC rates based on these spending patterns are artificially low as well.
8. ProPAC, Medicare and the American Health Care System: Report to the Congress (Washington: ProPAC, June 1997), 41-42, 52; M. Casey, "Serving Rural Medicare Risk Enrollees: HMO's Decisions, Experiences, and Future Plans," University of Minnesota Rural Health Research Center, Working Paper no. 19 (November 1997); and C. Serrato, R. Brown, and J. Bergeron, "Why Do So Few HMOs Offer Medicare Risk Plans in Rural Areas?" Health Care Financing Review (Fall 1995): 85-97.
9. ProPAC, Medicare and the American Health Care System: Report to the Congress (Washington: ProPAC, June 1997), 41-42, 52; M. Casey, "Serving Rural Medicare Risk Enrollees: HMO's Decisions, Experiences, and Future Plans," University of Minnesota Rural Health Research Center, Working Paper no. 19 (November 1997); and C. Serrato, R. Brown, and J. Bergeron, "Why Do So Few HMOs Offer Medicare Risk Plans in Rural Areas?" Health Care Financing Review (Fall 1995): 85-97.
10. ProPAC, Medicare and the American Health Care System: Report to the Congress (Washington: ProPAC, June 1997), 41-42, 52; M. Casey, "Serving Rural Medicare Risk Enrollees: HMO's Decisions, Experiences, and Future Plans," University of Minnesota Rural Health Research Center, Working Paper no. 19 (November 1997); and C. Serrato, R. Brown, and J. Bergeron, "Why Do So Few HMOs Offer Medicare Risk Plans in Rural Areas?" Health Care Financing Review (Fall 1995): 85-97.
11. ProPAC, Medicare and the American Health Care System, 44; and PPRC, Medicare Managed Care: Premiums and Benefits, Basics no. 4 (Washington: PPRC, April 1997).
12. ProPAC, Medicare and the American Health Care System, 44; and PPRC, Medicare Managed Care: Premiums and Benefits, Basics no. 4 (Washington: PPRC, April 1997).
13. This growth rate is to be projected by the HHS secretary by March of the year prior to the year for which rates are being determined. The BBA also specifies that these projected growth rates must be reduced by defined "offset percentages" through the year 2002 (for example, the rate projected for 1999 is to be reduced by 0.5 percentage points). There is also an adjustment mechanism that is to be used after the first year to correct retrospectively for under- or overprojections in prior growth rates.
14. L. Greenwald et al., "Risk Adjustment for the Medicare Program: Lessons Learned from Research and Demonstrations" (Paper presented at the Robert Wood Johnson Foundation invitational meeting, "Health-Based Payments: What Do We Know about Risk Adjustment?" 29 January 1998); and Federal Register 63, no. 173 (8 September 1998): 47506-47513.
15. L. Greenwald et al., "Risk Adjustment for the Medicare Program: Lessons Learned from Research and Demonstrations" (Paper presented at the Robert Wood Johnson Foundation invitational meeting, "Health-Based Payments: What Do We Know about Risk Adjustment?" 29 January 1998); and Federal Register 63, no. 173 (8 September 1998): 47506-47513.
16. In its March 1998 report to Congress, the Medicare Payment Advisory Commission pointed out that those few counties still paid under the 2 percent minimum update in 2003 will eventually convert to the blended rate as long as the Medicare growth rate remains above 2 percent (p. 18). These conversions will leave only blended-rate and floor-rate counties. With both of these types of rates increasing annually by the same Medicare growth rate after 2003, there will be no further switching between the types of payment rates, and any remaining differences in payment levels between urban and rural counties will be perpetuated.
17. J. Schoenman, "Impact of the Balanced Budget Act of 1997 on Medicare Risk Plan Payment Rates for Rural Areas," Final Report submitted to the Office of Rural Health Policy, Contract no. CSURC00005-01-2 (December 1997), 9-11.
18. N. Jeffrey, "Medicare Gets Weak Reply to Request for New Types of Health Programs," Wall Street Journal, 8 September 1998, B8.
19. Federal Register 63, no. 123 (26 June 1998): 35005.
20. Medicare Payment Advisory Commission, Report to the Congress: Medicare Payment Policy,Volume I (Washington: MedPAC, March 1998), 23.
21. Ibid., 19, 21-23.