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RnnnnHiv 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 in- cluded in this report. I can see many advantages to organizations that will assist beneficiaries with making informed choices by evaluating, pre- screening, and selecting plans that the organization's mem- bers might choose. However, I am concerned about a number of potential prob- lems with these organizations. First these organizations could segment the Medicare market by including in their member- ship younger and healthier Medicare beneficiaries and steer- ing 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 Organi- zations, we could see a new type of fraud perpetrated on Medi- care beneficiaries. 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? 27
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28 IMPROVING THE MEDICARE MARKET Fourth, these plans may well add a new layer of marketing on top of the massive marketing of plans to Medicare beneficia- ries occurring in a number of communities. Medicare benefi- ciaries may be tempted to join a Choice Facilitating Organiza- tion 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 mini- mum, some standards should be established for these organi- zations.