Medicare program: request for public comments on implementation of the Medicare+Choice program, and notice of timeframes for submission of applications for contracts--HCFA. Notice of intent to regulate; solicitation of comments

The Balanced Budget Act of 1997 (BBA) establishes a new Medicare+Choice program. Under this program, eligible individuals may elect to receive Medicare benefits through enrollment in one of an array of private health plans that contract with us. The BBA directs the Secretary to publish by June 1, 1998, regulations establishing standards for the Medicare+Choice program. We have already received comments and inquiries from the public on a number of issues associated with the Medicare+Choice program. This document solicits further public comments on issues related to implementation of the Medicare+Choice program. We intend to consider these comments as we develop an interim final rule to implement the Medicare+Choice program. This document also includes preliminary information regarding application procedures for organizations that intend to contract with us to participate in the Medicare+Choice program. This document also informs the public of a meeting to discuss the Medicare+Choice program.     

Medicare program; payment to health maintenance organizations and competitive medical plans--HCFA. Final rules with comment period

These regulations implement section 114 of the Tax Equity and Fiscal Responsibility Act of 1982 by authorizing Medicare reimbursement for health care services to eligible health maintenance organizations (HMOs) and competitive medical plans (CMPs) on a prospective basis for those entities that have a risk contract or on a reasonable cost basis for those that have a cost contract. The regulations set forth the requirements that an entity must meet in order to be: Eligible to enter into a Medicare contract (either risk or reasonable cost) as an eligible organization; and Reimbursed by Medicare on a capitation basis (either prospectively or retrospectively) for items and services furnished to Medicare enrollees. In addition, these regulations implement sections 2322 and 2350 (b) and (c) of Pub. L. 98-369 (Deficit Reduction Act of 1984), which further amended the Social Security Act concerning payments to HMOs and CMPs.     

Medicare program: request for public comments on implementation of risk adjusted payment for the Medicare+Choice program and announcement of public meeting--HCFA. Solicitation of comments; announcement of meeting

This notice solicits further public comments on issues related to the implementation of risk adjusted payment of Medicare+Choice organizations. Section 1853(a)(3) of the Social Security Act (the Act) requires the Secretary to implement a risk adjustment methodology that accounts for variation in per capita costs based on health status and demographic factors for payments no later than January 1, 2000. The methodology is to apply uniformly to all Medicare+Choice plans. This notice outlines our proposed approach to implementing risk adjusted payment. In order to carry out risk adjustment, section 1853(a)(3) of the Act also requires Medicare+Choice organizations, as well as other organizations with risk sharing contracts, to submit encounter data. Inpatient hospital data are required for discharges on or after July 1, 1997. Other data, as the Secretary deems necessary, may be required beginning July 1998. The Medicare+Choice interim final rule published on June 26, 1998 (63 FR 34968) describes the general process for the collection of encounter data. We also included a schedule for the collection of additional encounter data. Physician, outpatient hospital, skilled nursing facility, and home health data will be collected no earlier than October 1, 1999, and all other data we deem necessary no earlier than October 1, 2000. Given any start date, comprehensive risk adjustment will be made about three years after the year of initial collection of outpatient hospital and physician encounter data. Comments on the process for encounter data collection are requested in that interim final rule. We intend to consider comments received in response to this solicitation as we develop the final methodology for implementation of risk adjustment. This notice also informs the public of a meeting on September 17, 1998, to discuss risk adjustment and the collection of encounter data. The meeting will be held at the Health Care Financing Administration headquarters, located at 7500 Security Boulevard, Baltimore, MD, beginning at 8:30 a.m. Additional materials on the risk adjustment model will be available on or after October 15, 1998, and may be requested in writing from Chapin Wilson, Health Care Financing Administration, Department of Health and Human Services, 200 Independence Avenue, S. W., Room 435-H, Washington, DC 20201.     

Medicare program; waiver requirements and solvency standards for provider-sponsored organizations--HCFA. Interim final rule with comment period

This interim final rule with a request for comments implements authority to waive, in the case of provider-sponsored organizations (PSOs) that meet certain criteria, the requirement that Medicare + Choice organizations be licensed by a State as risk-bearing entities. The waivers will be approved only under certain conditions where the State has denied or failed to act on an application for licensure. This rule also establishes solvency standards that certain entities must meet to contract as PSOs under the new Medicare + Choice program. These standards apply to PSOs that have received a waiver of the requirement that Medicare + Choice organizations be licensed by a State as risk-bearing entities.     

Medicare program; payments to HMOs and CMPs and appeals: technical amendments--HCFA. Final rule with comment period

This rule clarifies and updates portions of the HCFA regulations that pertain to payment for services furnished to Medicare enrollees by health maintenance organizations (HMOs) and competitive medical plans (CMPs); appeals by Medicare enrollees concerning payment for those services; and appeals by HMOs and CMPs with regard to their Medicare contracts. This rule completes the special project aimed at the total technical revision of part 417. Part 417 contains the regulations applicable to all prepaid health care organizations, that is, HMOs, CMPs, and health care prepayment plans (HCPPs). These are technical and editorial changes that do not affect the substance of the regulations. They are intended to make it easier to find particular provisions, to eliminate needless repetition and remove obsolete content, and to better ensure uniform understanding of the rules.     

Full reporting by health maintenance organizations (HMOs) and competitive medical plans (CMPs) paid on a cost basis--HCFA. Final rule

This rule affects HMOs and CMPs that contract with HCFA to furnish services to Medicare beneficiaries and be paid on a cost basis. It requires a cost HMO or CMP to include in its cost report the costs of hospital and skilled nursing facility (SNF) services even if it has elected (under section 417.532(c) of the HCFA regulations) to have HCFA's intermediary process those claims and pay the hospital or SNF directly. This change is necessary so that HCFA can determine and compare the cost of all services furnished by HMOs and CMPs with the cost of equivalent services paid for under the fee-for-service system. This rule also adds a definition and makes technical changes to clarify and update certain related provisions of subparts O and U of part 417 of the HCFA rules.     

Full reporting by health maintenance organizations (HMOs) and competitive medical plans (CMPs) paid on a cost basis--HCFA. Correction notice

Federal Register document No. 95-16411, beginning on page 34885 of the issue of July 5, 1995 amended part 417 of the HCFA regulations to require full reporting by HMOs and CMPs of the costs of all services furnished to their Medicare enrollees. In that final rule we amended section 417.546 to remove paragraph (b). However, we failed to remove, from the introductory text of the section, a reference to the paragraph (b) that we removed. This notice corrects our oversight.     

Health financing research and demonstration grants; availability of funds for grants--HCFA. General notice

This notice announces the availability of HCFA funds for certain priority research and demonstration grants for fiscal year 1983. It contains information about the subject areas for grants that will be given priority, project requirements, application procedures, amounts and duration of grants, and waiver of state plan requirements for demonstration projects. HCFA makes funds available for activities that will help to resolve major health financing policy and program issues or to develop innovative methods for the administration of Medicare and Medicaid.     

Health financing research and demonstration grants; availability of funds for grants--HCFA. General notice

This notice announces the availability of HCFA funds for certain priority research and demonstration grants for the Federal fiscal year 1984. It contains information about the subject areas for grants that will be given priority, project requirements, application procedures, amounts and duration of grants, and waiver of State plan requirements for demonstration projects. HCFA makes funds available for activities that will help to resolve major health financing program issues or to develop innovative methods for the administration of Medicare and Medicaid.     

Medicare program; definition of provider-sponsored organization and related requirements--HCFA. Interim final rule with comment period

The Balanced Budget Act of 1997 establishes a new Medicare + Choice program that significantly expands the health care options available to Medicare beneficiaries. Under this program, eligible individuals may elect to receive Medicare benefits through enrollment in one of an array of private health plans that contract with HCFA. Among the new options available to Medicare beneficiaries is enrollment in a provider-sponsored organization (PSO). This interim final rule with comment period defines the term "provider-sponsored organization" for purposes of the Medicare program and establishes requirements related to meeting this definition. We believe that setting forth the definition of a PSO and the related requirements will facilitate the submission of applications to participate in the Medicare program as a PSO.     

Solicitation of information and recommendations for developing OIG compliance program guidance for certain Medicare+Choice organizations--OIG, HHS. Notice

This Federal Register notice seeks the input and recommendations of interested parties into the OIG's development of a compliance program guidance for Medicare+Choice organizations that offer coordinated care plans (M+CO/CCPs). The OIG has previously developed compliance program guidances for hospitals, clinical laboratories and home health agencies in order to provide clear and meaningful guidance to those segments of the health care industry. In an effort to provide similar guidance to certain M+C organizations, we are soliciting comments, recommendations and other suggestions from concerned parties and organizations on how best to develop compliance program guidance and reduce fraud and abuse within M+CO/CCPs.     

Medicare program; solvency standards for provider-sponsored organizations. Health Care Financing Administration (HCFA), HHS. Final rule

The Balanced Budget Act of 1997 established a new Medicare+Choice (M+C) program that offers eligible individuals Medicare benefits through enrollment in one of an array of private health plans that contract with us. Among the new options available to Medicare beneficiaries is enrollment in a provider-sponsored organization (PSO). This final rule revises and responds to comments on solvency standards that certain entities must meet to contract as PSOs under the new M+C program. These standards, originally established in an interim final rule published on May 7, 1998, apply to PSOs that have received a waiver of the requirement that M+C organizations must be licensed by a State as risk-bearing entities.     

Medicare program; establishment of the Medicare+Choice program--HCFA. Correction of interim final rule with comment period

On June 26, 1998, we published in the Federal Register, at 63 FR 34,968, an interim final rule with comment period that explains and implements those provisions of the Balanced Budget Act of 1997 that established the Medicare+Choice program. This notice corrects errors made in the June 26 document.     

Medicare and Medicaid programs, health care financing research and demonstration cooperative agreements and grants and availability of funds for cooperative agreements and grants--HCFA. General notice

This notice announces the availability of HCFA funds for certain priority research and demonstration cooperative agreements and grants for the Federal fiscal year 1985. HCFA makes funds available for activities that will help to resolve major health care financing issues or to develop innovative methods for the administration of Medicare and Medicaid. This notice contains information about the subject areas for cooperative agreements and grants that will be given priority; project requirements; application procedures and other pertinent information. It also cancels the February 4, 1985 closing date for HCFA waiver-only applications that was announced on November 9, 1983.     

Social Security Amendments of 1983--Public Health Service. Notice of changes in the review thresholds under Section 1122

This notice provides information on the Social Security Amendments of 1983 (Pub. L. 98-21) which were effective upon enactment on April 20, 1983. Under Section 1122 of the Social Security Act, the expenditure threshold for reviews of capital expenditures is changed from $100,000 to $600,000 and an exemption from review is provided for HMOs (and similar entities) if certain conditions are met. In addition, the amendments require all hospitals participating in the Medicare program to provide their overall 3-year capital expenditure plans to the designated planning agency or other appropriate health planning agency in the State.     

Medicare program; establishment of an expedited review process for Medicare beneficiaries enrolled in health maintenance organizations, competitive medical plans, and health care prepayment plans--HCFA. Final rule with comment period

This final rule with comment period establishes a new administrative review requirement for Medicare beneficiaries enrolled in health maintenance organizations (HMOs), competitive medical plans (CMPs), and health care prepayment plans (HCPPs). This rule implements section 1876(c)(5) of the Social Security Act, which specifies the appeal and grievance rights for Medicare enrollees in HMOs and CMPs. This rule requires that an HMO, CMP, or HCPP establish and maintain, as part of the health plan's appeals procedures, an expedited process for making organization determinations and reconsidered determinations when an adverse determination could seriously jeopardize the life or health of the enrollee or the enrollee's ability to regain maximum function. This rule also revises the definition of appealable determinations to clarify that it includes a decision to discontinue services.     

Medicare+Choice program; collection of user fees from Medicare+Choice plans and risk-sharing contractors--HCFA. Interim final rule with request for comments

This interim final rule with a request for comments establishes the methodology that will be employed to assess fees applicable to Medicare risk-sharing contractors for fiscal year (FY) 1998. Under section 4002 of the Balanced Budget Act of 1997, these contractors must contribute their pro rata share of costs relating to beneficiary enrollment, dissemination of information, and certain counseling and assistance programs. The Medicare+Choice regulation to be published in June of 1998 will implement this requirement for Medicare+Choice plans.     

Medicare program; criteria and standards for evaluating common working file hosts--HCFA. General notice with comment period

This notice describes the criteria and standards to be used for evaluating the performance of Common Working File (CWF) hosts in the administration of the Medicare program, for the current evaluation period beginning June 1, 1991. The results of these evaluations will be considered whenever the Health Care Financing Administration enters into, renews/extends, or terminates a Medicare carrier contract which provides for the performance of CWF host services. Since these services are currently performed by Medicare carriers, this notice is published in accordance with section 1842(b)(2) of the Social Security Act which requires us to publish for public comment those criteria and standards against which we evaluate Medicare carriers.     

Medicare Program; establishment of the Medicare+Choice Program--HCFA. Interim final rule with comment period

The Balanced Budget Act of 1997 (BBA) establishes a new Medicare+Choice (M+C) program that significantly expands the health care options available to Medicare beneficiaries. Under this program, eligible individuals may elect to receive Medicare benefits through enrollment in one of an array of private health plan choices beyond the original Medicare program or the plans now available through managed care organizations under section 1876 of the Social Security Act. Among the alternatives that will be available to Medicare beneficiaries are M+C coordinated care plans (including plans offered by health maintenance organizations, preferred provider organizations, and provider-sponsored organizations), M+C "MSA" plans, that is, a combination of a high deductible M+C health insurance plan and a contribution to an M+C medical savings account (MSA), and M+C private fee-for-service plans. The introduction of the M+C program will have a profound effect on Medicare beneficiaries and on the health plans and providers that furnish care. The new provisions of the Medicare statute, set forth as Part C of title XVIII of the Social Security Act, address a wide range of areas, including eligibility and enrollment, benefits and beneficiary protections, quality assurance, participating providers, payments to M+C organizations, premiums, appeals and grievances, and contracting rules. This interim final rule explains and implements these provisions. In addition, we are soliciting letters of intent from organizations that intend to offer M+C MSA plans to Medicare beneficiaries and/or to serve as M+C MSA trustees.     

Financial consequences of joining a Medicare HMO: an application of the illness episode approach to estimating out-of-pocket costs

To reduce Medicare costs, Medicare beneficiaries are being encouraged to enroll in "risk contract" HMOs. This paper explores the financial consequences to the elderly of joining a Medicare risk HMO. Using a new method for estimating consumer financial vulnerability called the illness episode approach, we modeled the out-of-pocket costs associated with thirteen illnesses of varying severity for beneficiaries with traditional Medicare coverage only and for beneficiaries who join one of two Los Angeles HMOs which charge no additional premium. The typical total charges for a year's treatment of these thirteen illnesses in Los Angeles in 1986 ranged from a low of $856 for moderate hypertension to a high of $28,411 for care of a severe stroke. For beneficiaries with traditional Medicare whose providers did not accept assignment, out-of-pocket costs ranged from $539 to $14,676 and from a low of 7.7 percent to a high of 84.1 percent of total charges. Out-of-pocket costs are considerably reduced in the two Medicare HMOs in this high-cost market; beneficiaries had modeled out-of-pocket costs ranging from $11 to $7,478 and from less than 0.1 percent of total charges to 60 percent of charges. Reductions in financial vulnerability ranged from over 20 percent to 99.3 percent. The relation of these reductions to altered benefit structures and the policy implications of the results are discussed.