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HEHS-96-47R 1 (1995-10-18)

handle is hein.gao/gaobaclbf0001 and id is 1 raw text is: United States Washngton, D.C. 20548 Health, Education and Human Services Division B-270224 October 18, 1995 The Honorable John F. Kerry United States Senate Dear Senator Kerry: As Medicare program costs continue to climb, the Congress is working to find better ways to provide and pay for beneficiaries' health care, both in the near term and in the more distant future. High on the list of issues under debate is the role of managed health care in the Medicare program. Many Congress members believe that Medicare beneficiaries should have more managed care options. While more than 50 percent of those receiving health insurance through their employers are in some form of managed care, the comparable percentage of Medicare beneficiaries is much lower. Medicare beneficiaries now have one widely available managed care option besides fee- for-service medicine: they can enroll in health maintenance organizations (HMO) where such entities are available. Before an HMO can provide care to Medicare beneficiaries, however, the Health Care Financing Administration (HCFA) of the Department of Health and Human Services must grant its approval.' As of August 1995, 171 HMOs had received HCFA's approval to provide care to Medicare beneficiaries on a risk basis. In these cases, Medicare pays the HMO a capitated amount each month for every beneficiary who enrolls. In return, the HMO must provide all services reimbursed by Medicare. 'Competitive Medical Plans (CMP) can also enroll Medicare beneficiaries with HCFA approval. CMPs are providers that operate like HMOs. They are subject to similar regulatory requirements except that they are permitted greater flexibility than HMOs in setting their commercial premium rates and the services they offer commercial members. For this correspondence, when we refer to HMOs, we are referring to both HMOs and CMPs. GAO/HEHS-96-47R Medicare Managed Care Growth Ito0

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