The new federal budget law creates a system under which providers will have to market to Medicare beneficiaries who can choose from a menu of plans.
The structure creates a whole new world of terms and deadlines.
Under the current system, beneficiaries basically have two options: traditional fee-for-service and traditional HMOs.
But under the new framework, seniors can choose from traditional fee-for-service Medicare, a private indemnity plan (Aug. 11, p. 3), medical savings accounts and various types of managed-care plans, including provider-sponsored organizations.
The program is called Medicare+Choice, an amalgamation of the House Medicare reform plan "MedicarePlus" and the Senate name "Medicare Choice."
Here's how it will work:
In November 1998, as a kind of practice run, HHS will release educational and promotional information to tell beneficiaries about the choices available to them.
Then, every November beginning in 1999, HHS will hold a health fair to inform beneficiaries, and each November will be the "annual coordinated election period" in which beneficiaries may choose from plans available in their area. There will be one constant-the traditional Medicare fee-for-service program. Other options will vary by market.
Under current law, Medicare beneficiaries can change plans and move in and out of the traditional fee-for-service plan every month. That will continue until the end of 2001 in a period called "continuous open enrollment and disenrollment."
For the first six months of 2002, seniors may change plans one time. After that, seniors can change plans only during the November election period and the first three months of the year.
According to lawmakers, the restrictions on movement between plans are needed for risk adjustment of capitated payments.
There are special rules for medical savings accounts because HCFA must deposit a capitated amount in a beneficiary's account at the start of the year. That will result in even more restrictive enrollment rules on seniors.
Annual open enrollment puts the onus on providers and insurers to market directly to seniors, a new world for many.
The law requires all marketing materials be approved by HCFA at least 45 days before distribution. Health plans, including PSOs, also will be subject to a variety of beneficiary protections, such as grievance procedures and external quality reviews.