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HRD-80-3 1 (1979-10-15)

handle is hein.gao/gaobaazxn0001 and id is 1 raw text is: HUMAN RESOURC DIVISLON B-164031(3) UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 OCTOBER 15, 1979 I' ~ - / ~ Mr. Jay B. Constantine Chief, Health Professional Staff Subcommittee on Health Committee on Finance United States Senate . Dear Mr. Constantine: Subject: HEW's Contract With Group Health Cooperative of Puget Sound Covering Medical Care Provided to Medicare Beneficiaries--Noncompliance With Open Enrollment Requirements and Other Selected Issues (HRD-80-3) Pursuant to your August 3, 1979, inquiry, we have examined asp ects of the administration of a contract be- tween the department of Health, Education, and Welfare (HEW) and the Group Health Cooperative of Puget Sound, a health maintenance organization. Under this contract, HEW pays the Cooperative for providing medical care to Medicare bene- ficiaries enrolled with the Cooperative. The contract between HEW and the Cooperative is a risk contract., If the actual cost of providing care to the Cooperative's Medicare enrollees is lower than HEW's ac- tuarial estimate of what it would have cost to provide medical care to those enrollees on a fee-for-service basis, HEW makes an incentive payment to the Cooperative to share the savings. If the actual cost of providing care to the Cooperative's Medicare enrollees is higher than HEW's ac- tuarial estimate of what it would have cost to provide medical care to those enrollees on a fee-for-service basis, the difference--referred to as losses--must be absorbed by the Cooperative and offset from savings realized in later years. (990515) 5o-3 110855

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