About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

Memorandum: Biased Selection in Medicare's HMOs 1 (July 1996)

handle is hein.congrec/cbo9194 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE June E. O'Neill U.S. CONGRESS Director WASHINGTON, D.C. 20515 MEMORANDUM July 17, 1996 TO: Health Staff FROM: Sandra Christensen SUBJECT: BIASED SELECTION IN MEDICARE'S HMOs A recent study commissioned by the Association of American Health Plans and done by Price Waterhouse (PW) claims to show that health maintenance organizations (HMOs) in 1992 experienced very little biased selection among Medicare enrollees.' However, the findings in the PW study are not credible because of flaws in the data and methods used. Adjustment for obvious biases in the PW results would more than quadruple its estimate of favorable selection. Although the quantitative extent of selection bias is uncertain, CBO's analysis of program data indicates that Medicare's HMOs continue to experience favorable selection not fully accounted for by the risk adjusters used to set payment rates. Research underway at the Office of Research in the Health Care Financing Administration and at the Physician Payment Review Commission will add to current information on this issue in the near future. BACKGROUND Medicare beneficiaries may opt to receive care from HMOs instead of the fee-for- service (FFS) sector, and HMOs may choose to enroll Medicare beneficiaries either on a risk basis or a cost basis. Because cost-based HMOs are reimbursed by Medicare much like fee-for-service providers, the discussion of HMOs here excludes cost-based plans. Risk-based HMOs are paid a predetermined amount for each Jack Rodgers and Karen Smith, Is There Biased Selection in Medicare HMOs? Health Policy Economics Group, Price Waterhouse LLP, Washington, D.C. (March I14, I1996) 1

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most