Medicare: Health Maintenance Organization Rate-Setting Issues
Abstract
The Omnibus Budget Reconciliation Act of 1987 requires us to analyze and assess the data and methods used to compute the monthly capitation payments made to risk-contract health maintenance organizations (HMOS) for Medicare beneficiaries who enroll in them. As called for in the act, this is an interim report on the progress of our study to assess the Medicare HMO rate-setting methodology. The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) authorized prospective per capita payments to HMOS under risk contracts at a rate equal to 95 percent of the average per capita cost. Medicare would pay for similar beneficiaries who receive services under the traditional fee-for-service system. This is known as the adjusted average per capita cost (AAPCC) method. The Health Care Financing Administration (HCFA) within the Department of Health and Human Services is responsible for computing AAPCC payment rates. HMOS must meet all of the requirements of the Social Security Act for Medicare participation and all of the requirements of the Public Health Services Act for federal certification as an HMO.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jan 31, 1989
- Accession Number
- ADA204170
Entities
Organizations
- United States Government Accountability Office