Medicare Compliance & Reimbursement

Benes who were 'abandoned' by M+COs in the past will need extra wooing.

Health plans thinking of jumping back into Medicare thanks to the increased federal funding should be warned that winning customers will be harder than they think.

Until Congress passed the Medicare reform bill last December, the last few years saw more and more health plans leaving the Medicare program due to its low reimbursement rates. As a result, many seniors who had joined M+COs in the mid-'90s were left out in the cold -- and jilted customers have long memories.

Warning: Seniors "are concerned about the same thing happening again," says attorney Vicki Gottlich of the Center for Medicare Advocacy in Washington. Many of the Center's clients were abandoned by Medicare plans two or three times, she says. As a result, seniors "are very reluctant to join managed care plans because they had the experience of being abandoned more than once," Gottlich says.

Based on calls that seniors have been making to the Medicare Rights Center, "there's a good deal of interest" in joining a Medicare plan, says Bob Hayes, president of the Center. But "there's a good deal of skepticism at the same time." Seniors have seen the ads that are now blanketing certain markets, and they think a Medicare plan could be "a very appealing product," Hayes says. "But people feel that they're walking over a trapdoor as well."

Hayes acknowledges that the people calling the Center might be among the more sophisticated consumers and therefore are more likely to have the memory of some unfortunate experiences in the past. "People who have not been previously burned by a Medicare HMO will probably approach it without the skepticism," he says.

Nonetheless, if plans want to reenter the Medicare managed care program (now dubbed Medicare Advantage) or expand into areas that they once exited, they'll need to work hard to win back skeptical, once-bitten beneficiaries.

Promise Longevity And Stable Benefits

Benes are concerned about joining a plan only to have it pull out of Medicare some time in the future, Gottlich says. People who were in health crises had a terrible time when their plans left the program, she says. In addition to having to deal with their health emergencies, they also had to deal with finding a new health plan and a new doctor.

Benes are also concerned that they'll pick a plan with a generous benefit structure only to see those benefits erode over time, Gottlich says. As a result, plans will need to stress in their marketing campaigns that they are committed to the program and are in it for the long haul, Gottlich says.

"Plans are going to have to take a very different approach to their marketplace and their consumers than they did in the past," says marketing consultant Stephen Tweed of Tweed Jeffries in Louisville, KY. They must treat consumers and providers differently than they did before, but that won't be easy. "It's going to be a tough road," he says.

The first time around, because plans felt financially squeezed by the federal government, they squeezed providers back, Tweed says. Providers therefore came to think of their local M+CO as their "enemy and nemesis" rather than a partner in care, he says.

"There was never any feeling of collaboration or mutual support or 'we're in this together to support patients or improve quality,'" Tweed says. As a result, many providers will be reluctant to go to the people who "beat them up a few years ago" and put themselves in position to get beat up again.