Using prior utilization to determine payments for Medicare enrollees in health maintenance organizations.
Year: 1985
Type: article
Abstract: The Tax Equity and Fiscal Responsibility Act of 1982 is expected to make it more attractive for health maintenance organizations (HMO's) to participate in the Medicare program on an at-risk basis. Currently, payments to at-risk HMO's are based on a formula known as the adjusted average per capita cost (AAPCC). This article describes the current formula and discusses a modification, based on prior use of Medicare services, that endeavors to more accurately predict risk. Using statistical simulations, formulas incorporating prior use performed better for some types of biased groups than a formula similar to the one currently employed. Major concerns involve the ability to "game the system." The prior-use model is now being tested in an HMO demonstration. This article also outlines the limitations of a prior-use model and areas for future research.
Source: PubMed Central
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2361922775