HMO Studies

ARC has  participated in a number of projects which involved evaluation of various HMO performance issues relevant to HMO participation in government health programs (e.g., Medicare and Medicaid). The primary  purpose of these projects has been to determine the feasibility of encouraging HMOs to participate in such programs by ensuring that the plans receive appropriate compensation for their services. The  participation of HMOs in government health programs is an important aspect of the federal government's efforts to provide health services in a cost efficient manner. ARC has also conducted one of the few comprehensive, multi-plan studies of HMO disenrollment. The characteristics of disenrollees are important in determining the selection effects experienced by HMOs during the disenrollment process.  Some of the HMO studies conducted by ARC include:

• Use of substance abuse treatment services in the HMO setting. A comprehensive set of demographic, cost, and health services utilization data is being collected for each participating plan.
• An analysis of HMO disenrollment patterns using a multi-plan, cross-sectional study design. The study analyzed demographic and utilization characteristics of commercial, Medicare, and Medicaid enrollees.
• Analysis of risks and rewards of entering Medicare risk contracts; development of an Adjusted Community Rate for a Medicare risk contract; analysis of anti-selection risks faced in open enrollment.
• Development of a rate structure to offer HMOs to participate in Medicaid capitation programs; analyses of the operating  problems of the HMOs in contracting with the state Medicaid agencies.
• Evaluation of the Adjusted Average Per Capita Cost (AAPCC) used to reimburse at-risk HMOs in the Medicare Program.  Continuing assistance in improving reimbursement systems for risk contracts.
• Evaluation of the Arizona Health Care Cost Containment System (AHCCCS): HMO financial experience under the program; the  prepaid capitated mode of financing; the method of capitated payment by HCFA.
• Studies to establish the time and intensity factor used to determine the adjusted community rate (ACR) in the Medicare program. Factor represents the differential in the use of physician services between enrollees under and over age 65.
• Evaluation of HMO physician incentive payments to determine their possible impact on quality of care.