In the fee-for-service realm, such differences of opinion often involve debate over who will pay for a service already provided. In a capitated health plan, however, these disputes generally occur before a service is rendered. Because the appeals process, discussed below, is often not understood and is always lengthy, an HMO's denial of coverage may result in the service not being provided. In some cases, by the time that an appeal is decided in favor of an enrollee, the service, such as short-term rehabilitation, may no longer provide benefit (U.S. General Accounting Office, 1995a).

Summary of Evidence of Medicare HMO Enrollee Satisfaction and Dissatisfaction

Research on what makes Medicare HMO enrollees happy enough to stay in their plans or unhappy enough to desire to leave them reveals the following:

  • Most people are satisfied with their managed care plans (Ferguson, 1995; Minnesota Health Data Institute, 1995; Rossiter et al., 1989), but a substantial fraction (perhaps 20 percent) are dissatisfied and some plans have experienced annual turnover of up to 20 percent (Dallek et al., 1993), although disenrollment rates vary widely and may be lower in mature HMOs.
  • Although instances of deliberate misrepresentation are probably rare, even marketing information approved by HCFA can be confusing to some Medicare beneficiaries and sales tactics can be intimidating (Dallek, 1995; Dallek et al., 1993). Salespeople may not spend enough time answering questions thoroughly or satisfying themselves that each enrollee fully understands the HMO's features, limits, and procedures for use.
  • People who do not understand the nature of the HMO, its limited network, its gatekeeper restrictions, its process for referral to care, the actual availability of primary care physicians, how they can change providers, and limits on out-of-area and emergency care appear likely to be unhappy and disenroll quickly, particularly if they are satisfied with their personal physicians outside the HMO (Office of Inspector General, 1995).
  • Although the vast majority of enrollees are happy, some


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