Health Care Financing Grants and Contracts Report Health Maintenance Organization Risk Contracting Under Medicare

摘要

This report describes operational aspects of HMO and competitive medical plan (CMP) risk-based contracting with the Medicare program. The report discusses the financial, marketing, health care delivery, and contract administration considerations surrounding Medicare risk-based contracting. These discussions are based on the experience of eight Medicare capitation demonstrations which began in 1980 and were the first instance of HMO's providing Medicare benefits under full-risk, prospectively determined capitation rates without the Health Care Financing Administration's retroactive adjustment of an HMO's actual costs. With the implementation of Section 114 of the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) authorizing the Medicare program to contract with HMO's and other eligible competitive medical plans in a manner similar to the eight HMO capitation demonstrations, the Medicare program anticipates significant growth in the number of Medicare beneficiaries joining prepaid health plans. This report provides valuable information about factors that prepaid health plan administrators should consider as they evaluate whether to contract with the Medicare program on a prospective, risk-basis.