News in brief - Oct. 2, 2000

Physician calls to Medicare carriers soon to be toll-free

The Health Care Financing Administration in September directed Medicare carriers to begin converting their provider telephone service lines to toll-free numbers and to complete the project this fall.

"Toll-free telephone service, an agency priority, also represents a HCFA commitment to the principle that no Medicare provider, supplier or agent acting on behalf of the provider or supplier should have to pay to talk to their Medicare contractor," HCFA said in a notice to carriers.

Medicare managed care companies are paid "more than enough" to provide the basic Medicare benefits package, says a new report by the Dept. of Health and Human Services' Office of Inspector General.

The report also says that efficiencies inherent in managed care should allow most, if not all, Medicare+Choice plans to offer additional benefits beyond those provided under the traditional program.

The report's conclusion runs counter to claims made by Medicare HMOs that inadequate payment has caused plans to withdraw from the Medicare+Choice program either entirely or from certain geographic areas. Plans' decisions have affected more than 1.6 million Medicare beneficiaries who have had to switch to a different health plan or return to the traditional program.

Congress is determining whether to provide plans with billions in additional funds they have requested to cover a shortfall the plans say resulted from the 1997 Balanced Budget Act.

The Health Care Financing Administration in September and October mailed copies of its Medicare & You 2001 handbook to more than 39 million beneficiaries and more than 360,000 physicians and physician groups across the country.

The agency also worked with the Interamerican College of Physicians and Surgeons to coordinate the mailing of Spanish versions of the publication to more than 49,000 physicians.

The handbook uses the most up-to-date, comprehensive information to inform seniors and people with disabilities about their Medicare benefits, rights and responsibilities.

"This year, the handbook has been updated to be more user-friendly based upon the suggestions of people with Medicare," said Michael McMullan, acting director of HCFA's Center for Beneficiary Services.

Joe Baker, executive vice president of the New York-based Medicare Rights Center, said the publication would be tailored to offer specific information on the Medicare options available in each state and in different regions of each state. He also noted that some of the handbook's Medicare HMO benefit and premium information may be outdated by 2001 if Congress passes legislation this fall that affects the program's managed care payment system.

Employees are just as responsible as employers for the decline in the use of fee-for-service health insurance, according to a new study.

An analysis of employers who offered indemnity coverage found that 62% of the decline in fee-for-service insurance is due to employee choice, while 38% is due to employers no longer offering this type of coverage.

"Employees are not being forced into managed care," said study co-author Jon Gabel, vice president of health system studies at the Health Research and Educational Trust.

When employers drop indemnity coverage, they traditionally substitute such options as a preferred-provider plan or a point-of-service product, said study co-author Paul Ginsburg, president of the Center for Studying Health System Change.

The researchers also found that the earnings of a company's work force were important indicators of a firm's decision to drop indemnity coverage. Only 2% of firms in which more than one-third of employees earned at least $75,000 per year were likely to drop indemnity coverage. By contrast, 67% of firms with few high earners were more likely to drop these policies.

The report was published in the September/October issue of Health Affairs.