If Congress passes Medicare reform that favors an increased role for private health plans, Medicare PPOs may fare better in rural markets than the HMOs of Medicare+Choice, which have had difficulty building tightly managed provider networks, says Leslie Norwalk, acting deputy administrator at CMS.
Especially since many HMOs, both rural and urban, have left the Medicare+Choice program due to low payments, why would doctors--who also say they are shying away from Medicare practice because of inadequate reimbursement--be willing to participate in Medicare PPOs?
"There is nothing in Medicare+Choice or a (Medicare) PPO that will dictate what a plan has to pay a provider," Norwalk says, speaking to the press after her address today at the annual Medicare conference of the American Association of Health Plans in Washington, D.C.
In January, 33 health plans in 23 states enrolled in a Medicare PPO demonstration project to test the impact of enhanced payment and risk sharing arrangements between CMS and the plans. The pilot PPOs, which currently cover about 75,000 beneficiaries, offer supplemental benefits such as drug coverage and allow seniors to see out-of-network providers for a higher share of the cost.
In terms of enrollment, "What we're seeing in the short term is about what we would expect to see," Norwalk says.
Private plans have a flexibility that Medicare does not, Norwalk says. It is not impossible that a plan could pay providers more than Medicare does, she says, because plans have the ability to change their payment structure and to contract with quality providers. Plans may be able to afford to pay those providers more in reward for the savings reaped from higher quality care, she says.
CMS would like to pay doctors based on quality now, but does not have the ability to do so because of how the Medicare statute is structured, Norwalk says.
Contracting issues in Medicare managed care are pivotal, Norwalk says, adding that it is her impression that whether managed care succeeds or fails is up to either plans or providers.
"What we're trying to do with Medicare reform is make the Medicare markets and the commercial markets look a little more similar," Norwalk says.