title: The promise and the peril.
abstract: The medicare population represents the most important group of covered lives to most providers. Medicare is now pushing seniors to join risk-based plans, and is encouraging providers to form PSOs to contract directly with Medicare for risk-based contracts. By eliminating the commercial HMOs as the middlemen, PSOs can not only control their own destiny as providers, they can retain the risk 'profit' in the community for enhanced services or higher payments to providers. To be successful, however, PSOs must have in place the key elements to manage the organization in a managed care environment. While the task of creating a PSO can appear daunting and the risk can be real and substantial, every provider organization should examine the potential of starting or joining a PSO. The greatest risk could be the risk of doing nothing, which could lead to loss of control of the Medicare population, decreased utilization, declining payment for services, the loss of patients being directed to other providers, and the loss of the risk premium from Medicare capitation.
authors.forename: D
authors.initials: D
authors.lastname: Whelan
mesh_terms: D002204:Capitation Fee / Q000331:legislation & jurisprudence; D006801:Humans; D018854:Managed Competition / Q000331:legislation & jurisprudence; D006278:Medicare / Q000331:legislation & jurisprudence; D011243:Preferred Provider Organizations / Q000331:legislation & jurisprudence / Q000458:organization & administration; D013714:Tennessee; D014481:United States