Medicare+Choice creates opportunities for PSOs.
The Medicare + Choice program, a feature of the Balanced Budget Act of 1997, has far-reaching implications for healthcare providers, and for provider-sponsored organizations (PSOs), in particular. Under Medicare + Choice, PSOs will be able to contract with Medicare if they meet certain conditions. Most significantly, the PSO must be established, operated, and majority-owned by healthcare providers that directly furnish a substantial portion of the covered services. PSOs and other participants in the Medicare + Choice program will receive aggregate annual payments based on geographic location and demographic characteristics of enrollees. Medicare + Choice provider participants should understand the details of how these payments will be calculated. For instance, geographically based payments will gradually be modified to reflect a more uniform payment rate nationally. In addition, participants in Medicare + Choice will need to meet state solvency requirements or apply to HCFA for a three-year waiver of those requirements to participate in the program. The best time to form a PSO may be in the next three years, before HCFA's authority to grant such waivers expires.
Brock
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Proskauer Rose LLP, Washington, DC, USA.
D014487:Centers for Medicare and Medicaid Services, U.S.; D019058:Community Networks / Q000191:economics / Q000458:organization & administration*; D003256:Community Participation; D005376:Financial Management; D006279:Health Maintenance Organizations / Q000191:economics / Q000458:organization & administration; D016345:Medicare Part B / Q000191:economics / Q000458:organization & administration*; D011907:Rate Setting and Review; D014481:United States