Effects of the 1997 Balanced Budget Act on Medicare managed care providers.

摘要

This dissertation examines the effects of the 1997 Balanced Budget Act (BBA) on Medicare managed care providers through the institution of the Medicare+Choice (M+C) Program. It is hypothesized that elements of the M+C Program caused managed care providers to exit counties in which they would otherwise have operated. The M+C Program created a new type of managed care offering that encompassed the traditional managed care plans under the broad designation of Medicare+Choice plan. It instituted new payment rate calculations for determining the monthly payment rate to Medicare managed care organizations (M+COs) providing healthcare services to Medicare beneficiaries. It instituted a uniform benefits requirement (UBR) that affected the benefits M+COs were required to offer to beneficiaries. Lastly, it created the Medicare Medical Savings Account Program (MSA) to increase beneficiaries' managed care options.; Theoretical analysis reveals one possible cause of M+CO exit to be the uniform benefits requirement (UBR). The UBR mandated that each M+CO must offer uniform premiums and benefits to all beneficiaries residing in the counties in which the M+CO's plan is offered. It is found that if competing M+COs have similar cost structures, if payment rates to M+COs are low, and if the disparity in payment rates among contiguous counties is large, M+COs may have an incentive to exit. Any time a M+CO exits, total social welfare decreases.; Empirical analysis reveals that exit did occur following the BBA. I find that this exit does not appear to be due to plan requirements within the M+C Program itself or to the change in the method of calculating payment rates to M+COs. It does appear to be due at least in part to the UBR.; The final element of the M+C Program considered is the Medicare MSA program. MSA programs combine a high deductible M+C plan with a medical savings account. This research illustrates that the profit incentives for M+COs to offer a MSA plan are inherently in conflict with the cost saving incentives of beneficiaries. Therefore, no plan will be offered. This conclusion is supported by evidence that no MSA plans have been proposed or implemented since the program's inception.