Where is the financial safety net for managed care physicians?
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OBJECTIVE: Empiric research on mechanisms by which managed care physicians attempt to mitigate financial risk is lacking. We assumed the perspective of a managed care plan in investigating the relationship between risk sharing and the match between a physician's capitation payments and costs of care. DESIGN: The study design was a family of payment simulations using 2 years of managed care claims data. METHODS: Claims from a cohort of 82,525 managed care patients were used, with year 1 data determining a capitation rate for year 2 primary care services. The net provider payment in year 2 was examined under scenarios that might modify financial outcomes, including stop-loss insurance, age- and gender-adjustment of capitation, and risk pooling within independent practice associations. RESULTS: The size of a provider's patient panel was positively correlated with net per capita payment (r = 0.22; P < 0.0001 without risk modification strategies). The variance of the ratio of net to total revenue was utilized as a proxy for the degree of risk assumed in caring for a panel of capitated enrollees. Risk modification strategies reduced this variance measure, with risk pooling producing the largest effect, especially for providers of panels of fewer than 135 patients. In contrast, age- and gender-adjustment of capitation payments had little effect on reimbursement outcomes. CONCLUSIONS: Short of increasing the pool of capitated patients, risk modification strategies appear limited in their ability to produce more equitable reimbursement to providers with small patient panels. With many providers assuming substantial risk in pursuing managed care contracts, these dynamics may favor organizational forms of medical practice that facilitate large patient panels within a single plan. (+info)
A new physician's guide to evaluating managed care opportunities.
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AUDIENCE: This article is designed for new physicians and administrators who evaluate and negotiate as providers with managed care organizations. GOALS: To provide a review of the major issues impacting on medical practices as they develop contractual relationships with managed care organizations. OBJECTIVES: 1. To review the four major types of health maintenance organizations, providing some general detail about the financial policies of each. 2. To outline how utilization review and quality assurance policies can affect individual physician practice. 3. To discuss risk-sharing arrangements employed by managed care organizations, including their financial and clinical impact, and to outline the issues a new physician should consider when evaluating a contract. (+info)
How ready are health plans for Medicare?
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CONTEXT: The Medicare program is encouraging its beneficiaries to enroll in capitated health plans. OBJECTIVE: To determine how prepared these plans are to handle chronically ill and frail elderly persons. DESIGN: Telephone survey of 28 health plans that together serve about one fourth of all enrollees of the Medicare Risk program. MEASURES: The degree of readiness (high, intermediate, or low) of health plans in seven domains that experts believe are important to the management of an elderly population. RESULTS: None of the 28 health plans had high readiness scores for all seven domains. The two domains for which the plans were most prepared were risk assessment and member self-care. The plans were least prepared for the domains of cooperative team care and geriatric consultations. CONCLUSIONS: Many plans do not offer the programs that experts believe are important for Medicare enrollees. They may hesitate to adopt strategies that lack data on effectiveness. (+info)
Capitation among Medicare beneficiaries.
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CONTEXT: The Medicare program has promoted capitation as a way to contain costs. About 15% of Medicare beneficiaries nationwide are currently under capitation, but tremendous regional variation exists. PRACTICE PATTERN EXAMINED: The proportion of Medicare beneficiaries who have enrolled in risk-contract plans in individual states and in the 25 largest metropolitan areas in the United States. DATA SOURCE: Health Care Financing Administration data files. RESULTS: Medicare beneficiaries are most likely to be under capitation in Arizona (38%) and California (37%). Eight other states have capitation rates greater than 20%: Colorado, Florida, Rhode Island, Oregon, Washington, Pennsylvania, Massachusetts, and Nevada. Thirty states, largely in the Great Plains area and the southern United States, have capitation rates less than 10%. Four major metropolitan areas have market penetration rates greater than 40%: San Bernardino, California; San Diego, California; Phoenix, Arizona; and Miami, Florida. Little penetration exists outside of metropolitan areas. CONCLUSION: Capitation in Medicare is a regional and predominantly an urban phenomenon. (+info)
Risk sharing in managed behavioral health care.
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While policymakers have expressed concern over the impact of risk sharing with providers on treatment patterns, the literature lacks decisive evidence on which to base policy. This paper evaluates the impact of a contracting change within a managed behavioral health organization from a fee-for-service system to a case-rate system with utilization management delegated to providers. The contracting change resulted in a 25 percent reduction in mental health visits per episode. This effect varies with the dollar amount of the case rate and is more pronounced for providers with a larger share of revenue from risk contracts and with intensive utilization management programs. (+info)
Nursing facilities and managed care.
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OBJECTIVE: To examine the extent to which Illinois nursing facilities have developed relationships with other healthcare providers, particularly managed care organizations (MCOs). STUDY DESIGN: A cross-sectional survey of nursing facilities designed to determine: 1) relationship objectives; 2) obstacles to developing relationships; 3) currently available services; 4) staffing for these services and; 5) nursing facility approaches to networking. The survey was sent to a census sample of 867 nursing facilities serving the elderly in Illinois. Descriptive and multivariate logistic regression analyses of relationships determined to be formal/risk-sharing were performed. STUDY POPULATION: The sample included 523 Illinois nursing facilities. A total response rate of 60% was achieved (523/867). RESULTS: Higher strategic goals, urban location, nonprofit ownership status, higher percentages of private pay and/or Medicare clients (vs Medicaid), and provision of home care and subacute services were all significant predictors of formal or risk-sharing relationships with MCOs. CONCLUSIONS: Facilities with more relationships and higher goals have more formal/risk-sharing relationships with MCOs. Facilities in urban areas have more relationships, likely due to the fact that rural facilities have fewer options and operate in different markets. In addition, nursing facilities rely on Medicare referrals from hospitals, and these Medicare patients, especially those in urban areas, are increasingly controlled by MCOs. (+info)
Developing a managed care delivery system in New York State for Medicaid recipients with HIV.
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In the state of New York, models of care known as HIV Special Needs Plans (HIV SNPs) are being developed to meet the unique health and medical needs of Medicaid recipients with HIV. Establishing managed care plans for the 80,000 to 100,000 HIV-infected Medicaid recipients residing in the state has required considerable effort, including distributing planning grants to solicit information and recommendations regarding program and fiscal policy; convening a workgroup to facilitate discussions between the state and the provider and consumer communities; conducting a longitudinal survey to assess the impact of managed care on persons with HIV; and developing a longitudinal, person-based, encounter-level database representing the clinical and service utilization histories of more than 100,000 patients for state fiscal years 1990 to 1996. The key fiscal issues identified and discussed were capitation rates, initial capitalization levels, and risk-adjustment mechanisms. Other pertinent issues included the importance of a benefits package supporting a comprehensive, integrated continuum of state-of-the-art services; marketing and enrollment; attention to provider and consumer training and education needs; and interdependence of financial reimbursement and benefits packages. From our experience in New York State, we conclude that a successful model of Medicaid managed care for persons with HIV should build on the existing infrastructure of services, using a collaborative process among government agencies, healthcare providers, and HIV/AIDS consumer communities. A future challenge lies in the implementation of the HIV SNP model and evaluation of its soundness and ability to ensure quality healthcare services. (+info)
The Medicare prescription drug benefit: how will the game be played?
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Most recent proposals to add a prescription drug benefit to the Medicare program suggest using pharmacy benefit managers (PBMs) to control costs and promote quality. However, the proposals give little detail on the institutional arrangements that would govern PBM operations and drug procurement. The recent Congressional Budget Office cost estimate of the Clinton administration's proposal reflects this lack of detail on how PBMs would function. We sketch an approach for structuring PBM operations that focuses on competition among PBMs, manufacturers, and distributors; incentive pricing; and risk sharing with PBMs. (+info)