Page 29 - Management Theory 2023-2024 Edition

www.pharmacyexam.com Krisman

3. Medicare Part C or Medicare + Choice

Medicare Part C, formerly known as “Medicare+Choice,” is now known as “Medicare Advantage.” If the
patient is entitled to receive Medicare Part A and enrolled in Part B, he/she is eligible to switch to the
Medicare Advantage plan, provided that the patient resides in the plan’s service area. Medicare
Advantage provides the following options:

The introduction of the Medicare+Choice program represents what is arguably the most significant
change in the Medicare program since its inception in 1965. As its name implies, the primary goal of the
Medicare+Choice program is to provide Medicare beneficiaries with a wider range of health plan choices
to complement the original Medicare option. Alternatives available to beneficiaries under the
Medicare+Choice program include both the traditional managed care plans (such as HMOs) that have
participated in Medicare on the capitated payment, as well as a broader range of plans comparable to
those now available through the private insurance.

Option 1: Medicare HMO: This plan offers coverage under the Medicare HMO and is not necessarily
new. Unlike other plans, this plan does not require the separate coverage or Medigap. As stated,
Medigap costs vary by plan and state, but the monthly rate of $100 is not unrealistic. The major benefit
from the Medicare HMO is the fact that there may not be any additional costs for care at all - since
Medicare will cover everything. Detractors of HMOs point to the poor care, bad physicians, the
requirement to use a limited number of specific physicians and so on. However, the more realistic and
objective analysis tends to show good to very good approval ratings for HMOs overall. Additionally, one
must recognize that private care by private physicians is not exempt from problems.

Under the current option, an enrollee has the right to opt out of an HMO and convert to standard
coverage with only a 3-month notice. Starting in 2002, however, the required notice will be 9-month.
This appears to be intent to stop frequent switching but it will unquestionably require a lot more
research of the HMO that an enrollee selects since, if they opt for an unsatisfactory one, they will not be
able to get out as quickly. This is part of the change in government and corporate philosophy in
requiring more consumer involvement in making their own selections.

Option 2: Medicare PPOs: A Preferred Provider Organization is similar to an HMO with a network of
physicians and hospitals that offer care at reduced costs to enrollees. They may use primary physicians
as gatekeeper. The major differences between HMO and Medicare PPOs are:

1. Use any physician within the PPO network.
OR
2. More importantly, pay a higher fee and opt to use the physician outside of the PPO network. (This
format is now also being offered by some major HMOs).

Option 3: Provider Sponsored Organizations (PSO): Under this plan, hospitals and physicians will be
able to form their own plans PSOs similar to an HMO. An article by the American Institute for Economic
Research notes that an organization that involves such a small number of physicians and enrollees may
be severely limited by finances and numbers to offer care at the same level of an HMO or PPO.

Option 4: Medical Savings Accounts (MSA): MSAs were introduced to the corporate world several years
ago and have met with reasonable success. It offers enrollees (390,000 maximum) the ability to
establish tax free savings accounts that are used mostly for medical expenses. These would be partially

88