Medicare Compliance & Reimbursement

Early-adopting Medicare PPOs site some success, but many questions.  If preferred provider organizations are indeed the future of Medicare, then now's the time to take a closer look at how the Medicare demonstration PPOs have been performing. PPOs will be a more viable option in Medicare than HMOs have been, Leslie Norwalk, acting deputy administrator for the Centers for Medicare & Medicaid Services, said at the Medicare and Medicaid Conference held Oct. 21 by the American Association of Health Plans/Health Insurance Association of America. CMS is hoping to bring PPOs not just to the thickly settled areas that already have M+COs but to rural areas as well. So far, however, most of the Medicare PPOs "are being offered in areas where Medicare+Choice already exists," according to a recent analysis by Mathematica Policy Research, Inc. As of Oct. 1, 75,431 beneficiaries had enrolled in 31 plans, according to CMS. Over half the demo enrollees belong to one plan, Horizon Blue Cross Blue Shield of New Jersey. Seniors favor stability, predictability, and simplicity; that's the first lesson that Horizon has learned in its short experience offering a Medicare PPO, explained Christy Bell, senior vice president of the health plan, at the conference. Employers and members are losing patience and trust in the Medicare+Choice program, Bell said, and the PPO option has succeeded thus far because it is workable and flexible. Enrollees are not having service problems and are not having trouble understanding the program, Bell said. As long as that continues, the PPO demonstration has a chance to retain its members and lure more. Bell shared other lessons that Horizon has learned over the last few months. First of all, for a health plan to have a successful experience in Medicare, the plan must build a partnership with CMS; having an adversarial relationship, or trying to go it alone, is a recipe for failure. Secondly, plans must aggressively market their Medicare products, Bell said. Potential enrollees are confused as to how a Medicare managed care plan would work and whether it's the right choice, and plans need to work hard to make their case. But it's not all bad news. "There's a great deal of resiliency in the senior market," Bell told attendees. Seniors are always going to need coverage, and they want a stable plan. As plans achieve stability within Medicare, they will be able to attract more members and grow their Medicare products. "PPOs allowed us to survive and thrive in the Medicare market," Bell said. If CMS hadn't started the PPO demonstration when it did, he said, Horizon might have had to exit Medicare entirely - a tough choice to make, since once a plan leaves it is so difficult [...]