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| Reimbursement rates raised to entice HMOs |
October 17, 2000 |
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| WASHINGTON -- In light of a new plan to raise Medicare Choice reimbursement rates for New Mexico, Rep. Heather Wilson met with top officials from three local HMOs, asking them to reconsider their decisions to discontinue the program.
Presbyterian Healthcare Services, Lovelace Health Systems and St. Joseph Healthcare announced during the summer they would not continue their Medicare Choice programs because the low federal reimbursement rates did not nearly cover the costs of the service.
All three companies said the new reimbursement rates have opened the possibility of reinstating the program, but none would commit to doing so until the legislation is passed and their analysts can fully assess the situation.
While St. Joseph was poised to pull out of the Albuquerque metropolitan market and surrounding rural areas, Presbyterian and Lovelace are planning on ending only their rural programs.
Wilson, an Albuquerque Republican, did not secure any concrete promises from the three health care providers but said she was "encouraged by the meetings."
"They`re obviously watching this bill very carefully, and it is my hope that they will reassess their decisions to either withdraw from the program (or) continue the program," Wilson said.
Wilson and Sen. Pete Domenici, an Albuquerque Republican, cinched a deal last week to increase the reimbursement rate for New Mexico`s Medicare Choice providers from $430 to $525 in the Albuquerque metropolitan area and from $415 to $475 in the rest of the state.
The agreement is expected to be included in the Labor-Health and Human Services appropriations bill, to be voted on by the U.S. House of Representatives and Senate later this week.
"From a financial point of view, I think that the math may work for them. I think there`s a considerable hope," Wilson said.
Wilson and Domenici penned a letter to the HMOs urging them to reconsider their decision to pull out of the Medicare Choice program.
If these three providers pull out as planned in January, approximately 15,000 of the 45,000 New Mexico seniors enrolled in the program will lose their coverage.
The insurance companies cited several reasons for opting to pull out, including low reimbursement rates. Other problems, they said, include "adverse selection," in which more unhealthy people sign up for the program than healthy people, thus making it difficult for the insurance company to cover its costs with healthy persons` premiums.
Some providers also do not have their own physicians` network or facilities in the nonmetropolitan areas.
In the joint letter, Domenici and Wilson said: "In preparation for the expected increased reimbursement rates, we urge you to begin considering how this new reimbursement rate will allow your company to continue providing excellent service to New Mexicans.
"Specifically, we would like you to reconsider your decision to end service in some areas and also to consider whether or not this new rate will allow you to open enrollment to new patients."
Wilson acknowledged she has heard from several health care providers that the higher rate is simply not high enough to foot the bill for providing service in the rural areas.
Dr. Martin Hickey, CEO of Lovelace, said: "The amount needed to provide health care in truly rural areas is substantially more expensive than the metropolitan areas."
Hickey said if the bill is passed with the proposed rate increases, Lovelace will be able to continue Medicare Choice in the four counties surrounding Albuquerque, but will definitely not be able to reinstate coverage in rural areas, including Las Cruces.
"We are studying it now, and we are hopeful that we will be able to maintain our presence in Santa Fe," Hickey said.
Wilson empathized with Hickey and said increasing the reimbursement rate is only the first step.
"The problem of rural health care is one that`s going to be ongoing. I think we`ve made real progress with this bill, but this will always be an ongoing problem," Wilson said. "It`s not as though this is some sort of final solution."
St. Joseph CEO Dr. Arthur Dunn said in a statement: "We are watching with great interest and optimism, but until there is passage and the bill is signed, we really cannot say much. We will consider our options at that point."
Presbyterian spokeswoman Michelle Campbell, said the company has been "struggling to survive" in the Medicare Choice program, and has "filed for" removal for 2001 in Santa Fe and Rio Arriba counties.
"With this change, we have a much better chance of staying in Medicare Choice (in Albuquerque) past 2001, and the funding changes in the rural areas give us the opportunity to consider things we would never have had a chance to consider," Campbell said.
Whether Presbyterian reinstates the program in the rural areas will depend in large part on the cooperation of the health care providers there. |
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