Beginning Jan. 1, Medicare HMOs will be assessed a fee of nearly 0.5% of total Medicare payments to pay for HCFA's beneficiary information campaign that starts in November 1998.
The balanced-budget bill enacted in August requires HCFA to begin yearly health fairs and other information dissemination programs next year relating to the Medicare+Choice program, Medicare's new menu of options for all beneficiaries.
To pay for the campaign, Congress said HCFA could charge Medicare health plans, including provider-sponsored organizations, a user fee.
Last month Congress authorized HCFA to collect $95 million next year to pay for its scheduled fall health fairs. HCFA originally sought $200 million. However, managed-care plans complained that even though they have enrolled less than 20% of all Medicare beneficiaries, they were being asked to foot the bill for an information campaign aimed at every senior. Seeking compromise, Congress reduced the amount by more than half.
Unless Congress makes changes, HCFA is scheduled to receive $150 million in fiscal 1999 and $100 million each year thereafter for the information campaign.
HCFA officials and seniors groups have questioned whether the funding will be sufficient to cover the cost of the information program. In a recent speech, Bruce Fried, head of HCFA's managed-care operations, said that while $95 million isn't enough, HCFA remains committed to a full campaign of health fairs, informational brochures and a hotline for beneficiary questions.
"We're behind the eight ball," Fried said.
HCFA chose to charge plans 0.428% of their total monthly Medicare reimbursement after rejecting several other plans. For example, HCFA considered charging a flat per-beneficiary fee but chose not to because it would have hit plans in low-payment areas harder than those in high-payment areas.
There are currently 279 Medicare risk plans with an average enrollment of about 28,000. The average monthly Medicare revenues for the plans is about $12 million, though some large plans receive more than $100 million a month, according to HCFA.