Medicare Compliance & Reimbursement

What managed care organizations are thinking as they prepare to remake Medicare.

Medicare has finally been reformed, and reimbursement rates are looking a lot more attractive for health plans. So is now the time for health plans to get back into Medicare?
 
Many in the industry are asking that very question. There are three major categories of plans that will be among the entrants, predicts John Gorman, president of Gorman Health Group in Washington. The first category is made up of plans that already have a substantial bit of business in another government program, such as Medicaid or TRICARE. Knowing how to work with the government as a customer is a core competency for these plans, and that's a key to success in Medicare. "That's important, because the government is obviously different from any other customer that you could do business with."

The second category consists of plans that used to be in Medicare+Choice - the former name for managed Medicare plans - but who left the program during the recent exodus, and the third is a small group of the more innovative Medicare supplemental insurers that are considering M+C as a way of covering their bets on their senior business, Gorman says.

Group Health Inc. in New York is currently participating in the PPO demonstration project that the Centers for Medicare & Medicaid Services launched in 2003. The Medicare reform law's changes to reimbursement rates and other improvements should enable GHI to grow the Medicare options it can offer beneficiaries, spokeswoman Ilene Margolin tells MLR.

Like many other health plans, GHI is currently assessing whether it will participate in Medicare Advantage as one of the regional programs, which would be a step up from its current role as a local plan in the demo.
 
Although entering the Medicare program can seem a daunting task, new entrants may have an advantage over plans that have dabbled in Medicare in the past only to exit when the rates became too low, explains Gary Donner of consultancy MMC 20/20 in Atlanta. "I'm sure most plans that have exited the market have ruffled a lot of feathers," he says. Those plans will need to deal with negative opinions from seniors who felt abandoned by them and by providers who had to deal with the hassle.
 
But Gorman doesn't think that's enough to stop such plans from getting back in the program. "Beneficiaries need these plans a lot more than the plans need the beneficiaries," he points out. "When you're on a fixed income, you don't have a whole lot of options, and if one of these plans comes back in and they're offering a good value, you put your sore feelings aside and you do what your pocketbook dictates." Regulators, [...]