MANAGED CARE May 1997. ©1997 Stezzi Communications

Home | Daily Briefing | Current Issue | Peer-reviewed Studies | Archives | Subscribe | Search

Click here for more information


Several Bills Would Extend Insurance
To Many Children Who Lack Coverage

Another campaign promise, children's health care, continues to show up on legislative priority lists on both sides of the aisle. In what has been described as "an uninsurance epidemic," 23 million children reportedly lacked health insurance for at least a month in 1995 or 1996.

Massachusetts Democratic Sen. Edward M. Kennedy and Utah Republican Sen. Orrin Hatch have joined hands on a bipartisan proposal that was countered by a strictly Republican approach introduced by Sen. Arlen Specter of Pennsylvania. Both bills would pick up 4 to 5 million children of the working poor who make too much money to qualify for Medicaid. Hatch-Kennedy is permanent, however, while the Specter bill is only a five-year demonstration. Under Hatch-Kennedy, the states would chip in; under Specter, the feds would pick up the entire tab.

Don't forget that the president also has a bill, as does Senate Minority Leader Thomas Daschle of South Dakota. And how's this for covering the bases? House Minority Leader Richard Gephardt of Missouri has two bills–one espousing tax credits, the other offering (dare we say it?) block grants to the states to provide children's health insurance.

"We are not going to get hung up on the how," Gephardt asserts. "We just want to get this done."

More bills should be just the ticket!

New PSOs Hoping To Grab Piece Of Medicare Pie

Provider service organizations are being minted by the states by the dozens, with an average application being approved in 90 days. At present, 39 states charter community-based providers to deal directly with health care purchasers, such as employers, on a capitated basis. PSOs are operating in 27 states. The states jealously guard their right to oversee such entities, which as risk-sharers fall under state jurisdiction. The Health Care Financing Administration, on the other hand, has helped establish PSOs as part of its Medicare Choices demonstration project.

So who's in control? At the moment, the discussion is revolving around some sort of staged oversight–HCFA for the first few years, reverting to state regulation after that. Part of the problem is the 50-50 rule requiring health plans soliciting Medicare business to obtain half of their revenues from the commercial side. Federal legislation would be required to allow Medicare-only PSOs even to exist.

Specialties Attack Expense Payment Reduction Proposal

Physician groups monopolized a House Ways and Means Health Subcommittee meeting on the FY 1998 budget to talk about proposed changes in Medicare physician payments for practice expenses–though such changes were not actually in the budget. The changes are expected to be implemented by the Health Care Financing Administration by Jan. 1, 1998.

Wait, say some specialists and surgeons, who are among the almost 40 percent of providers expected to experience significant cuts in practice expense reimbursement, which is basically overhead. "Many inpatient surgical procedures and some specialties could suffer cuts of more than 80 percent in their practice expense values," testified the AMA. Specialties not so direly affected (such as primary care doctors) urged HCFA to stick to its original deadline.

HCFA To Display Medicare HMO Info on 'Web'

Also regarding Medicare, HCFA plans to help elderly people make sense of the barrage of managed care advertising competing for their attention. With HMOs enrolling 80,000 Medicare beneficiaries a month (now 13 percent of the Medicare population), many senior citizens are faced with a decision: go into an HMO or not.

HCFA plans to post basic cost and benefit comparisons for plans in each region of the country. Coming this summer: members' ratings of their own plans. Later this year, beneficiaries who are Internet surfers can see how well prospective HMOs are doing in providing basic services such as diabetic eye exams and mammograms.

Wait a minute! Senior citizen netsurfers? That has indeed been a concern of the plan's detractors–that the elderly often do not have, or even care to have, Internet access. HCFA counters by saying printed material also will be available. It expects plans to disseminate the comparisons in writing to interested prospects.

Take as Needed...

Stating a theme that might resonate in official circles, two researchers writing in the Journal of the American Medical Association have recommended creation of a new national agency to oversee for-profit health care providers. "Redundant" was the reaction of both the Joint Commission on Accreditation of Healthcare Organizations and the National Committee for Quality Assurance. Nevertheless, the last line of this script probably has not been written.... The Physician Payment Review Commission is recommending that Medicare HMO reimbursements be reduced. Medicare, asserts the PPRC, is overpaying HMOs because it assumes that patients treated in HMOs are just like those treated in the traditional program, while in fact they are healthier. Before enrollment, managed care patients incur only 63 percent of the costs of patients in traditional care. The president has proposed paying HMOs 90 percent, rather than 95 percent, of the average amount paid in the traditional program. PPRC chair Gail Wilensky suggested cutting payments more substantially during the first year or two that a Medicare beneficiary is in an HMO.... At press time, there were indications that President Clinton was about to nominate David Satcher, M.D., director of the Centers for Disease Control as the new surgeon general.... In case you were planning to doze right off tonight, the Medicare trust fund is currently in "free fall," losing another $3 billion in February, triple the loss of a year ago.