HCFA raises bar for providers

Standards get tougher for HMOs

Given the complexity, detail, and confusion surrounding the exact future and meaning of selected Medicare+Choice regulations, some experts are unsure whether this new option adds up to a competitive advantage for those organizations that already are managing Medicare risk contracts.

Washington, DC, health care lawyer William Schiffbauer, JD, for instance, says these proposed regulations constitute "a daunting challenge to new market entrants." This in turn gives current major Medicare risk players like United Healthcare Corporation and Aetna US Healthcare an upper hand, as they "have the will and ability to march through these regulations."

"My opinion is these requirements will be onerous to all contractors, whether current or prospective," says McDermott, Will and Emery's Wendy Krasner, JD, in Washington, DC. "This is particularly true in the areas of quality assurance, quality improvement, beneficiary protections, provider participation, and compliance-related requirements."

^{HCFA has significant leverage}

Indeed, many current contractors may have to work double time because HCFA says their present risk contracts must be in full compliance before they will be permitted to move into the Medicare+Choice market.

The loaded gun pointed at present Medicare risk contractors is the section in the proposed rule giving HCFA authority to deny an entity's point-of-service application if it fails to finish a corrective action plan during the period of its previous contract with HCFA, regardless of whether the contract was under the old provisions or the new Part C provisions.

"This gives HCFA significant leverage in determining which current contractors can participate in the Medicare+Choice program," says Krasner.

When it comes to quality of care, HCFA wants to raise the bar for Medicare+Choice contracts, not only beyond what is required by the Balanced Budget Act, but also compared to many commercial plans.

One of the most significant changes in Medicare regulations relates to the quality improvement system for managed care standards HCFA has been developing with plans and providers to help make sure participating health plans protect and improve the health and patient satisfaction of their enrollees.

Most significant is the requirement that plans go beyond simply requiring quality assessment systems and capabilities and actually establish performance improvement standards. For instance, under HCFA's Medicare+ Choice Quality Assessment and Performance Improvement provisions, rather than simply identifying and fixing problems when they pop up, Medicare + Choice organizations must institute an overall systemic quality improvement program.

HCFA's performance measurement and reporting standards are one example of this focus on quality. Medicare+Choice organizations must measure and report their performance against minimum local, regional, or national standards set by HCFA, and then report the results to the agency. HCFA has yet to develop specific performance baselines, and it could be several years before such standards are finalized, say HCFA officials.

Therefore, for the 1999 contract year, performance measures probably will include a Health Employer Data and Information Set audit in addition to a member satisfaction survey, they say.

Once a set of minimum performance measures is approved, organizations should be aware that under HCFA's proposed rules, the agency has the right to cancel a Medicare+Choice organization's contract to participate in the program if it turns out the plan failed the previous year's quality review.