Inquiry J Health Car
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Inquiry J Health Car · Jan 1998
Reform of the Medicare AAPCC: learning from previous proposals. Average Adjusted Per Capita Costs.
Since 1982, Medicare has contracted with health maintenance organizations (HMOs) on a risk-contract basis, paying plans based on Average Adjusted Per Capita Costs (AAPCCs). The calculation of the AAPCCs has been criticized on several fronts. ⋯ Many of its provisions were enacted through the 1997 Balanced Budget Act. This paper models the effect of the earlier proposal on AAPCC rates and discusses the extent to which the proposal and the reforms in the 1995 Balanced Budget Act would address shortcomings identified in the original rate formula.
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Inquiry J Health Car · Jan 1998
Comparative StudyThe consequences of paying Medicare managed care plans their costs.
This study examines 1993 Medicare expenditures for enrollees in 63 managed care plans that were reimbursed on a cost basis. We find that government spending for enrollees in cost-reimbursed plans in 1993 was substantially greater than it would have been had these enrollees instead received care in traditional fee-for-service Medicare or in a Medicare risk plan. The increase was due entirely to the much higher expenditures for Part B services under cost reimbursement. The findings suggest that Medicare cost reimbursement of health plans should be eliminated or significantly modified.