New Medicare+Choice (M+C) Program

On June 26, 1998, HCFA issued a proposed rule as required by the Balanced Budget Act (BBA) of 1997. The BBA creates the new Medicare Part C, also referred to as "Medicare+Choice Program." The introduction of the M+C program represents what is arguably the most significant change in the Medicare program since its inception in 1965. The goal of the legislation is to offer a wider range of health plans to beneficiaries. Below is a summary of the changes.

Medicare+Choice Options

Under the BBA, beneficiaries will be able to receive their medical care under Medicare Part A which covers inpatient hospital care, Part B which covers physician services, DME, and home health services, or the new Medicare Part C, hereafter referred as M+C. Beneficiaries are eligible to receive medical services through a M+C plan if they are covered under both Medicare Part A and B. However, there will be a short grandfathering period for beneficiaries that are eligible only for Part A to enroll in a M+C plan.

Beginning January 1, 1999, beneficiaries will have the following M+C options:

• M+C coordinated care plans, including HMOs, with or without point of service options, provider sponsored organization (PSO) plans and preferred provider organization (PPO) plans.

• M+C medical savings account (MSA) plans, a combination of high deductible M+C health insurance plans and a contribution to an M+C MSA. Participation in this plan is limited to 360,000 beneficiaries.

• M+C private fee for service plans.

Some of the key provisions in the interim final rule provide for extensive physician protections. These rules would apply to all plans that contract with HCFA and would even extend to companies that subcontract with the Medicare HMO. This means that downstream risk takers that subcontract with a managed care plan will have to abide by the rule. Below is a summary of the major physician and patient protections.

Physician Safeguards

The new rule creates regulations regarding physicians' relationships with Medicare+Choice plans. They include:

• A gag clause ban that would prevent plans from prohibiting physicians from advising patients on medical care or treatment options, their health status, their right to refuse treatment or the risks and benefits of treatment.
• A requirement that plans consult doctors about policies regarding the organizations' medical policies, quality assurance programs and medical management procedures.
• A ban against discriminating with participation and payment against doctors acting within the scope of their licenses.
• A requirement that when an organization denies, suspends or terminates a physician contract, the plan provide a written notice of the reason for the action, standards used to evaluate health care professionals, the number and mix of health care professionals the plan needs and/or the affected party's right to appeal.
• A mandatory 60-day written notice of the decision by either the plan or the doctor to terminate a contract without cause.
• A requirement that the plan have written notice of rules regarding terms of payment, utilization review, quality improvement, credentialing, data reporting and confidentiality.

Physicians will be able to provide beneficiaries with information regarding what M+C plans with which they participate. However, HCFA is concerned that physicians may "steer" patients. Therefore, they have requested comments regarding physician counseling of patients regarding the selection of Medicare options.

Patient Safeguards

The new rule expands patient protection regulations and patient rights. They include:

• An emergency medical condition exists if a "prudent layperson" could reasonably expect that the absence of immediate medical attention would result in serious jeopardy or harm to the individuals. In addition, the new definition of emergency services includes emergency services provided within and outside of the plan's service area.
• Access to specialists and access to obstetrician/gynecologists for female beneficiaries.
• Expedited appeals process for emergent or urgent situations.
• There will be an attempt to ensure that service areas of M+C network plans are consistent with community patterns of care and /or rating practices.
• Proposed service areas will be evaluated to determine whether covered services are available and accessible to any resident of the area eligible to elect enrollment in the plan.
• Review steps will be taken to ensure that the delineation of the areas do not discriminate against beneficiaries through "gerrymandering" or "redlining."
• HMOs and CMPs must accept all qualified beneficiaries in a service area and must have uniform premiums and benefits for any service area.
• At a minimum, each proposed M+C service area must be an area in which the full range of covered services are available and accessible to Medicare enrollees primarily through providers within the service area.

The rule can be downloaded from the Internet. To access the final rule, visit http://www.access.gpo.gov/nara/index.html.

Adapted from FMA Online