South Florida HMO Demonstration Projects

Testimony was given concerning the results of an ongoing review of Medicare's health maintenance organization (HMO) demonstration projects in Florida. GAO noted that delayed recording of beneficiary enrollment dates led to: (1) Medicare paying non-HMO providers for services that had already been paid for; (2) doctors not being paid or being paid more than once for services provided; (3) the HMO not paying beneficiaries' Medicare deductible and coinsurance charges; and (4) beneficiaries paying for services that the HMO should have paid for. In accordance with the lock-in provision, Medicare should deny any services obtained by beneficiaries without HMO authorization. The amounts paid for out-of-plan physicians' services represented duplicate payments because the costs of the services were included in the payment rates to the HMO. GAO found that incorrect enrollment information, along with other coordination problems between the Health Care Financing Administration, the intermediaries, the HMO, and hospitals, led to: (1) hospital bills being incorrectly paid; (2) the costs of HMO-authorized hospital services not being charged to them; and (3) underpayments to the HMO. GAO found that, if an HMO was remiss in providing needed services that a beneficiary obtained out-of-plan shortly after enrollment or disenrollment, the HMO should be required to accept the responsibility for such services.