Developing an Information Infrastructure for the Medicare+Choice Program: Summary of a Workshop (1999)

On March 4 and 5, 1998, the Institute of Medicine (IOM) Committee on Choice and Managed Care held a 2-day workshop entitled Developing the Information Infrastructure for Medicare Beneficiaries. This workshop was a follow-up to the IOM report entitled Improving the Medicare Market: Adding Choice and Protections (Institute of Medicine, 1996). Among that study's seven major recommendations was the following (p. 89):

The March 1998 workshop focused on the Medicare provisions in the Balanced Budget Act of 1997, which mandate that the Health Care Financing Administration (HCFA) develop a "nationally coordinated education and publicity campaign" in 1998 and move Medicare beneficiaries to an open-season enrollment process by the year 2002. Approximately 50 individuals from the public and private sectors were invited to the workshop. These individuals were selected for their special expertise on the information needs of Medicare beneficiaries as well as the technologies that can be used to assist this group with choosing the appropriate health plan in a competitive, managed care environment (see Appendix B for a list of the workshop participants). To provide focus to the workshop's deliberations, noted health care consultant Lynn Etheredge was commissioned to write a paper that could help set a framework for discussion for the meeting. Mr. Etheredge's paper is found in Chapter 3. The material found in Chapter 2 and Chapters 4 to 8 is based upon presentations given at the workshop and the ensuing discussion among the meeting's participants. Chapter 9, which contains the committee's findings and recommendations stemming from the workshop, was also released as a separate document in June 1998 as the Letter Report to the Administrator of the Health Care Financing Administration.

Since the early 1970s the federal government has supported the voluntary enrollment of Medicare beneficiaries in managed care programs through a number of demonstration projects. The 1982 Tax Equity and Financial Responsibility Act, which became operational in 1985, gave Medicare beneficiaries the option to enroll in federally qualified health maintenance organizations (HMOs) and competitive medical plans, all of which offer benefits covered by Medicare and the majority of which also offer cost-sharing and supplemental service coverage that replaces the coverage obtained through Medigap policies.*

In 1995, HCFA announced its Medicare Choices demonstration program. This demonstration program had a broad goal of testing beneficiaries' responses to a range of health care delivery system options and of evaluating the suitability of these options for Medicare. The passage of the Balanced Budget Act of 1997 gave HCFA the authority to contract with an even greater variety of managed care and fee-for-service plans under its Medicare+Choice program. These include:

• coordinated care plans (HMOs [with and without point-of-service options], preferred provider organizations, and provider-sponsored organizations);
• private fee-for-service plans;
• medical savings accounts; and
• religious fraternal benefit society plans.

According to the Medicare Payment Advisory Commission, at least 72 percent of Medicare beneficiaries currently have access to a Medicare risk plan and 39 percent have five or more plans available in their local area (Medicare Payment Advisory Commission, 1998a).

The Balanced Budget Act gives HCFA until 2002 to develop a comprehensive beneficiary education and information infrastructure. Both private-and public-sector workshop participants stated that the task with which HCFA is charged is among the most challenging that any organization has faced. HCFA will be responsible not only for providing information about the traditional Medicare program but also for educating its 35 million beneficiaries and other information intermediaries about the Medicare+Choice enrollment process. Extensive research findings and workshop participants who work with the Medicare population, such as Age Wave and The Senior Network, have found that the current Medicare population lacks adequate basic knowledge about what the traditional Medicare program covers, let alone what the newer health care delivery options will add to the mix (Hibbard and Jewett, 1998; Kleimann, 1998a; U.S. Department of Health and Human Services, 1997a).