Managed-care plans that contract with Medicare will receive an average payment increase of 5.9% in 1997-1.3 percentage points less of an increase than they were projected to receive earlier this year.
In July, HCFA estimated that plans would receive a 7.2% increase. However, that estimate was lowered to 5.9% this month because of lower inflation in the overall Medicare program.
Last year the increase was 10.1%.
Robert Hoehn, a healthcare industry analyst with Salomon Brothers in New York, called the increase "a little disappointing but still within the range that was expected."
The Medicare program pays managed-care plans an amount estimated to be 95% of what Medicare spends on an average fee-for-service patient on a county-by-county basis.
The county with the highest reimbursement is Rich-mond County, N.Y., at $767.35 per month. The county with the lowest monthly payments is Arthur County, Neb., at $220.92.
In releasing the new payment rates, HCFA Administrator Bruce Vladeck called for an overhaul of Medicare's managed-care payment system.
Last year, both the Republican and Clinton administration balanced-budget plans would have changed the payment method to decrease the spread between the counties with the highest and lowest reimbursement rates.
The GOP plan would have raised the minimum payment to more than $300 a month, and yearly increases would have been graduated to give low-reimbursement areas a larger annual update. The proposed changes would have significantly altered payment in a number of counties.
For example, under HCFA's newly released rates, Logan County, W.Va., will receive nearly $650 a month for each Medicare beneficiary enrolled in a managed-care plan next year. But under last year's GOP proposal, the reimbursement rate would have been about $475 a month, 27% less than under current law, according to an analysis by Ernst & Young, a national accounting and consulting firm.