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Improving the Medicare Market: Adding Choice and Protections (1996)

Chapter: A Additional Commentary Regarding Choice Facilitating Organizations

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Suggested Citation:"A Additional Commentary Regarding Choice Facilitating Organizations." Institute of Medicine. 1996. Improving the Medicare Market: Adding Choice and Protections. Washington, DC: The National Academies Press. doi: 10.17226/5299.
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Suggested Citation:"A Additional Commentary Regarding Choice Facilitating Organizations." Institute of Medicine. 1996. Improving the Medicare Market: Adding Choice and Protections. Washington, DC: The National Academies Press. doi: 10.17226/5299.
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Additional Commentary Regarding Choice Facilitating Organizations

One committee member raised some additional concerns about the committee's recommendations on Choice Facilitating Organizations and wanted the following comments to be included in this report.

I can see many advantages to organizations that will assist beneficiaries with making informed choices by evaluating, prescreening, and selecting plans that the organization's members might choose.

However, I am concerned about a number of potential problems with these organizations. First these organizations could segment the Medicare market by including in their membership younger and healthier Medicare beneficiaries and steering those members to selected plans.

Second, no standards exist for these organizations. What are they and who will they represent? How will they be funded: by their membership? by the managed care plans (who will provide them an enrollment fee for all members signed up through the organization)? Without some standards for the types of entities that can become Choice Facilitating Organizations, we could see a new type of fraud perpetrated on Medicare beneficiaries.

Suggested Citation:"A Additional Commentary Regarding Choice Facilitating Organizations." Institute of Medicine. 1996. Improving the Medicare Market: Adding Choice and Protections. Washington, DC: The National Academies Press. doi: 10.17226/5299.
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Third, what standards will these organizations use to select plans. What is to stop a Choice Facilitating Organization from selecting the poorest quality plans because they provide the highest payment for enrollment of members?

Fourth, these plans may well add a new layer of marketing on top of the massive marketing of plans to Medicare beneficiaries occurring in a number of communities. Medicare beneficiaries may be tempted to join a Choice Facilitating Organization because of sophisticated marketing techniques, not because they have carefully selected plans.

For these reasons, I think extra caution is in order. Perhaps HCFA could establish a demonstration project to assess the effectiveness of Choice Facilitating Organizations. At a minimum, some standards should be established for these organizations.

Suggested Citation:"A Additional Commentary Regarding Choice Facilitating Organizations." Institute of Medicine. 1996. Improving the Medicare Market: Adding Choice and Protections. Washington, DC: The National Academies Press. doi: 10.17226/5299.
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Page 121
Suggested Citation:"A Additional Commentary Regarding Choice Facilitating Organizations." Institute of Medicine. 1996. Improving the Medicare Market: Adding Choice and Protections. Washington, DC: The National Academies Press. doi: 10.17226/5299.
×
Page 122
Suggested Citation:"A Additional Commentary Regarding Choice Facilitating Organizations." Institute of Medicine. 1996. Improving the Medicare Market: Adding Choice and Protections. Washington, DC: The National Academies Press. doi: 10.17226/5299.
×
Page 123
Suggested Citation:"A Additional Commentary Regarding Choice Facilitating Organizations." Institute of Medicine. 1996. Improving the Medicare Market: Adding Choice and Protections. Washington, DC: The National Academies Press. doi: 10.17226/5299.
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Page 124
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Medicare beneficiaries are rapidly moving into managed care, as attempts to restrain the growth of this costly entitlement program progress.

However, advocates for patients question whether the necessary information and structures are in place to enable Medicare consumers to select wisely among private-sector managed care options. Improving the Medicare Market examines how to give Medicare beneficiaries the same choice of health plan options enjoyed in the private sector—yet protect them as consumers and patients.

This book recommends approaches to ensuring accountability and informed purchasing for Medicare beneficiaries in an environment of broader choice and managed care—how the government should evaluate and approve plans, what role the traditional Medicare program should play, how to help to elderly understand their options, and many other practical matters.

The committee discusses the information requirements of Medicare beneficiaries and explores in detail how best to respond to their special needs. And it examines the procedures that should be developed to provide the necessary protections for the elderly in a managed care system.

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