Development of an end-stage renal disease managed care demonstration.

At present, end-stage renal disease (ESRD) beneficiaries cannot enroll in health maintenance organizations (HMOs) or social health maintenance organizations (SHMOs), but HMO members who develop ESRD may remain enrolled, and the Health Care Financing Administration (HCFA) pays the HMO a state-specific, but otherwise unadjusted, capitation rate that is 95% of fee-for-service (FFS) costs. Thus, more than 6,000 ESRD beneficiaries were enrolled in HMOs in 1993, when Congress mandated an ESRD SHMO demonstration in which not only Medicare-covered services, but extra benefits were to be provided to Medicare beneficiaries, with the SHMO receiving a capitation rate based on 100% of FFS costs. The demonstration will test (1) the feasibility of year-round open enrollment of ESRD beneficiaries in HMOs; (2) a capitation system based on treatment status--dialysis, transplant, or functioning graft--and adjusted for age and whether diabetes was the cause of renal failure; (3) the effect of the additional benefits; and (4) whether managed care can improve ESRD quality outcomes. HCFA made demonstration awards in September 1996 to Kaiser-Permanente in Southern California; Health Options in Southern Florida; and Phoenix Healthcare in Central Tennessee. The sites are expected to have 1 year of planning and development before beginning the congressionally mandated 3 years of service delivery. There will be an independent evaluation.

Innovative concepts in public-private coordination of benefits for retirees.

Benefits--in the broadest and most literal sense of the word--can be coordinated between Medicare and employer group health plans. What that may entail, however, ranges from (1) researching complementary plans' effect on Medicare utilization and costs; to (2) incorporating those findings into rate setting for the Medicare capitation payment that would be administered by the EGHPs; to (3) some potential cost-containing redesign of complementary plans that would be acceptable to employees/retirees and their unions and would involve improvements in information provided to consumers; to (4) some consideration given to allowing savings achieved through capitation to become part of a trust that would prefund the EGHP retiree plan.