OFFICE OF 
INSPECTOR  GENERAL 
BENEFICIARY PERSPECTIVES OF 
MEDICARE RISK 
199 6 
JUNE GIBBS BROWN 
4 
Inspector  General 
MARCH 1998  EXECUTIVESUMMARY

PURPOSE 
To describe beneficiaries experiences in their Medicare risk   in 1996. 
BACKGROUND  AND  METHODOLOGY 
Medicare beneficiaries may join a risk health maintenance organization (HMO) through 
the Medicare program.  In return for a predetermined monthly amount per enrollee, the 
HMO must provide all Medicare-covered services that are medically necessary, except 
hospice care.  Once enrolled, beneficiaries are usually required to use HMO physicians 
and hospitals. As of October 1997, the Health Care Financing Administration (HCFA) 
reported 307 risk HMO plans served   Medicare enrollees. 
Using HCFA databases, we selected a two-stage random sample of 4,065 enrollees and 
disenrollees from 40 Medicare risk  Since our primary focus was Medicare 
beneficiaries experiences in their risk   we collected information directly from 
them. As in our 1993 study, we surveyed both enrollees and disenrollees to compare their 
responses, and thus, to gain greater insight into HMO issues.  We did not attempt to 
validate their responses through record review or HMO contact. 
FINDINGS 
Over 85 percent of beneficiaries indicated good access to Medicare-covered services, 
hospital admission and specialty care.  Most beneficiaries reported quick appointments 
when they were very ill and timely appointments for routine services. 
Over 89 percent of beneficiaries attributed their improved or maintained health to HMO 
medical care; a large majority rated their primary doctors and   overall 
performance as good to excellent. 
Most enrollees (93   had no plans to leave their   3 1 percent of disenrollees left 
their   for administrative reasons only, e.g., moved from HMO service area. 
Improvement is evident by statistically significant changes in reports of: 
Encountering consistently busy telephone lines when trying to make appointments for 
enrollees (20% to 10%) and disenrollees (37 % to 16 %). 
i  Doctors failing to take beneficiaries health complaints seriously for enrollees (12% 
to 7%) and disenrollees (39% to 19%). 
Doctors failing to provide Medicare-covered services to disenrollees (22% to 12%). 
Going out-of-plan for services without HMO approval by disenrollees (22% to 10%). 
Medical care received through the   causing worsened health for disenrollees 
 to 11%). 
Inappropriate screening of health status at application for enrollees (43 % to 18   and 
disenrollees (48% to 20%); however, the effect of a slight word change in the 1996 
survey question is unknown. 
Annlication   -- HMO screening for health status at application was reported by 
18 percent of beneficiaries.  While a marked reduction from the 1993 level of 43 percent, 
this is still a concern, as is the unimproved rate (14%) of beneficiaries who dont 
understand their physicians gatekeeper role from the beginning. 
Appeal and grievance rights -- In 1996, beneficiaries lack of awareness of appeal rights 
remained high, with 35 percent of disenrollees and 27 percent of enrollees being 
uninformed; similarly, 40 percent of disenrollees and 28 percent of enrollees were 
unaware of their grievance rights.  Of the beneficiaries   did file formal complaints, 36 
percent perceived unfair handling of their complaints; 55 percent of the uninformed said 
they would have filed complaints had they known their rights. 
Emergency and urgent care -- In 1996, of the 39 percent of beneficiaries who said they 
bad used emergent and urgent services while in the sampled HMO, 10 percent said their 
 refused to pay.  Four percent of all beneficiaries said they did not seek the 
emergent/urgent care they believed they needed because they thought the HMO might not 
 services -- In 1996, of the women responding about access to 
gynecological services, most said either referrals from their primary physicians were 
required (35%) or they didnt know what was required (38%); of the remaining women, 
64 percent didnt feel they needed gynecological services.  Womens not being aware or 
not believing they need these services is of concern because national standards recommend 
regular gynecological care and tests for older women. 
--
--
 limited and disabled beneficiaries had significantly more problems with 
accessing specialists, hospital care, and other Medicare-covered services, as well as with 
receiving full explanations of their treatment options and serious consideration of their 
health complaints. For example, functionally limited enrollees were more likely to report 
their doctors didnt take their health complaints seriously (16% vs. 5%) and failed to 
ii  provide needed services (8 % vs. 2  More disabled enrollees (16 % vs. 4   reported 
difficulty in obtaining referrals to specialists. 
 ill beneficiaries reported more problems with hospital admissions and with 
accessing physician services and non-routine services such as diagnostic tests and physical 
therapy; however, they had the same good access to other services as healthier 
beneficiaries. 
 of 
 for some services. 
Disenrollee data have been used by researchers and program managers to detect systemic

problems or trends, but, more recently, are being developed for HMO-specific consumer

use. Analysis of our 1996 data revealed several areas for which disenrollees reported

more problems than enrollees:

Didnt get quick appointments when they were very ill (15% vs. 4%)

HMO doctors didnt take their health complaints seriously (19 % vs. 7 
 refused to pay for emergency or urgent care (20% vs. 10%)

Medical care through the HMO caused their health to worsen (11% vs. 3 
HMO doctor failed to provide needed Medicare-covered services (12 % vs. 3 %)

Pap tests (50% vs. 58%) or mammograms (60% vs. 71%) were offered to fewer

disenrolled women in the last year 
RECOMMENDATIONS 
We continue to believe HCFA needs to improve its oversight of the Medicare risk HMO 
program in six persistent problem areas: 
Assuring   properly inform beneficiaries about their appeal and grievance rights; 
Improving beneficiaries understanding of HMO procedures and restrictions for 
obtaining medical services; 
Preventing inappropriate screening of beneficiaries health status at application; 
Identifying and carefully monitoring service access problems encountered by 
functionally limited, disabled, and chronically ill beneficiaries; 
Systematically collecting and tracking over time HMO-specific beneficiary-reported 
data on access to medical services and reasons for disenrollment; and 
Distinguishing between administrative and non-administrative disenrollments, if HMO 
disenrolhnent rates are to be used as a performance indicator. 
The 1996 survey data also suggest that HCFA needs to take steps to better inform older 
women about gynecological services and health. 
AGENCY  COMMENTS 
HCFA concurred with all the reports recommendations. 
111  TABLEOFCONTENTS

EXECUTIVE  SUMMARY

INTRODUCTION
 1 
FINDINGS
 5 
Summary of Beneficiaries Assessments
 5 
Health and Functional Status
 6 
Federal HMO Requirements
 8 
Access: Appointments for Services
 11 
Access: Medical Services and Out-of-Plan Care
 13 
Access: Behavioral Barriers to Services
 17 
Functionally Limited, Disabled and Chronically Ill HMO Beneficiaries
 20 
Reasons for Joining and Leaving an HMO
 22 
RECOMMENDATIONS
 27 
AGENCY  COMMENTS
 30 
31 
BIBLIOGRAPHY
 36 
APPENDICES

Methodology  A-l 
Statistical Data for Key Questions  B-l 
Demographic Comparison of 1993 and 1996 Data  C-l 
Supplementary Tables for Beneficiary Survey Findings  D-l 
Supplementary and Statistical Tables for Functionally Limited, Disabled 
and Chronically Ill Beneficiaries  E-l 
Text of Agency Comments  F-l  INTRODUCTION

PURPOSE 
To describe beneficiaries experiences in their Medicare risk   in 1996. 
BACKGROUND 
Medicare beneficiaries may join a risk health maintenance organization (HMO) through 
the Medicare program.  When enrolling beneficiaries,   may not deny or discourage 
enrollment based on a beneficiarys health status except for end-stage renal disease 
 or hospice care.  They must also adequately inform beneficiaries about lock-in to 
the HMO and appeal/grievance procedures.  Under a risk contract, Medicare pays the 
HMO a predetermined monthly amount   rate) per enrolled beneficiary. In 
return, the HMO must provide all Medicare covered services that are medically necessary 
except hospice care.  Once enrolled, beneficiaries are usually required to use HMO 
physicians and hospitals (lock-in) and to obtain prior approval from their primary care 
physicians for other than primary care.  The Health Care Financing Administration 
(HCFA) has oversight responsibility for Medicare risk contracts with   Effective 
July 1997,   internal reorganization placed many managed care functions under the 
new Center on Health Plan and Provider Operations. Previously, the HCFA Office of 
Managed Care was the responsible agency.  As of October 1997, HCFA reported 307 
risk-based HMO plans served   Medicare enrollees. 
 of 
The Office of Inspector General (OIG) has conducted several studies of Medicare managed 
care.  In 1995, the OIG released two fmal reports based on 1993 survey data from 2,882 
Medicare HMO enrollees and recent disenrollees randomly sampled from 45 Medicare 
risk   While the majority of enrollees and disenrollees reported access to medical 
care that maintained or improved their health, the results also indicated some serious 
problems with enrollment procedures and service access. Further, the reports suggested 
how HCFA could use information from beneficiaries to guide its performance monitoring 
and assessments of   HCFA was generally receptive to the reports conclusions and 
recommendations, and had begun to implement an improvement strategy, some features of 
which addressed the problems the OIG had noted. 
In 1996, the OIG released   reports for two more areas of the Medicare HMO 
program -- HMO customer satisfaction surveys and Medicare HMO appeal and grievance 
 The first found that, while virtually all Medicare risk and cost 
conduct customer satisfaction surveys, the surveys do not target their Medicare members, 
they lack uniformity, and technical weaknesses in many may mask problems and inflate 
satisfaction with managed care plans.  The report concluded that these factors substantially 
1  reduce the usefulness to HCFA of the customer satisfaction surveys conducted by 
HCFA stated that the study provided important insights in influencing its decision to 
develop, its own beneficiary satisfaction survey capability.  The work on appeal and 
grievance processes also noted several problems. While most beneficiaries were generally 
aware of their rights to formally complain about services and payments, they had less 
understanding of the particular circumstances under which these rights can be exercised. 
In addition, the communication between the HMO and the beneficiary regarding denials of 
service or payment did not work well.  The study also found that   did not fully 
comply with HCFA directives for processing appeals and grievances, and that a review of 
HMO marketing/enrollment materials and operating procedures showed incorrect or 
incomplete information on appeal and grievance rights. HCFA agreed with the conclusion 
that improvements were needed and was working to implement a number of the 
recommendations with plans for better informing beneficiaries of their appeals and 
grievance rights. 
In 1997, HCFA has taken additional steps towards the improvement of their Medicare risk 
HMO program.  In April 1997, HCFA published its final rules for an expedited review 
process and reconsideration when services are denied.  In partnership with the Agency for 
Health Care Policy and Research, HCFA has launched its own survey of HMO enrollees 
with a survey of disenrollees under development. Ultimately, HCFA anticipates releasing 
comparative risk HMO data from the surveys and HEDIS measures to the public. 
The results presented in this report update the 1993 OIG survey of HMO beneficiaries and 
address new issues, such as beneficiaries reasons for joining an HMO and perceptions of 
the   costs of HMO membership. 
 of access 
Beyond referencing medical necessity and an actual or likely adverse effect on the 
beneficiary, the law and regulations do not clearly delineate what full access to services 
through an HMO means.  To adequately cover access to services, we adapted a definition 
from literature that uses five dimensions: availability, accessibility, accommodation, 
affordability, and acceptability. Operationally, we divided access into five areas: 
appointments, including waiting time and administrative processes for making them; 
restrictions on medical services; incidence and reasons for out-of-plan care; behavior of 
primary HMO doctors and other HMO personnel towards beneficiaries; and beneficiary 
awareness of appeal and grievance rights. 
See Appendix A for the full text of the Methodology. 
2  From HCFAs Group Health Plan (GHP) data base, we selected a two-stage random 
sample, stratified at the second stage.  At the first stage, we selected Medicare risk 
from those under contract with HCFA as of May 1996.  We first excluded those that did 
not meet our parameters for length of time in the Medicare program or for number of 
enrollees and disenrollees. From the remaining   we randomly selected 40. At the 
second stage, we selected current enrollees and recent disenrollees from each sampled 
HMO.  After excluding enrollees and disenrollees who had not been members for at least 
3 months, we randomly selected 5 1 enrollees and 5 1 disenrollees from each of the 40 
 Finally, using HCFAs Enrollment Data Base, we dropped beneficiaries who had 
died or who appeared as current enrollees, but had actually disenrolled since the last 
update to the GHP file. This process resulted in 2,038 enrollees and 2,027 disenrollees 
for a total of 4,065 beneficiaries. 
Since this studys primary focus is the Medicare beneficiaries perceptions of their risk 
HMO experiences, we only collected information from them. We surveyed both enrollees 
and disenrollees to compare their responses, and thus, to gain greater insight into HMO 
issues.  We did not contact   or their staffs, nor did we attempt to assess the quality 
or propriety of medical care rendered by the   to these beneficiaries.  We initially 
mailed structured survey forms to 4,065 beneficiaries in early August 1996. In 
September 1996, we mailed a follow-up letter and second survey form to non-respondents; 
we closed data collection in October 1996. 
With the exception of four questions on overall ratings of their HMO experiences, we did 
not specifically ask beneficiaries about their satisfaction with the   Instead we 
asked for more concrete details on beneficiaries perceptions and experiences, such as, 
how long were waits for appointments, or how often, if ever, did a primary physician fail 
to take their health complaints seriously. Both enrollees and disenrollees provided 
information on sample and demographic data, enrollment experience, past and present 
health status and functional level, cost of HMO membership, HMO environment, and 
available HMO services. 
A total of 3,229 survey forms were returned.  Of these, 3,003 were usable yielding an 
unweighted return rate of 74 percent overall, 82 percent for enrollees (N= 1,665) and 66 
percent for disenrollees 
We weighted the collected data to reflect a non-response bias, differences in enrollment 
size among the sampled   and distribution of enrollees and disenrollees in the 
3
 universe (97% vs. 3%) for the sample period.**  The results are generalizable only to the 
132   that met our sampling parameters. 
Because of the imbalance between enrollees and disenrollees, we primarily analyzed the 
two groups separately.  Comparisons between enrollees and disenrollees, or 
populations of them form the basis for all tables in this report, particularly when these 
groups differed markedly in reporting their HMO experiences.  All tables show the 
weighted percentages with the weighted number of respondents in parentheses. 
Additionally, we computed 95 % confidence intervals and statistical significance for key 
questions (see Appendix B). 
 of 
A core set of questions on enrollment experience and access to services appears in both 
the 1993 and 1996 survey forms.  Throughout the report, we present this comparative data 
for key questions.  One caveat is that we selected our 1993 beneficiary sample somewhat 
differently.  Despite the differences in sample selection, the   and beneficiaries 
sampled in 1993 and 1996 appear to have similar characteristics in the same proportions 
(see Appendix C). The   are predominantly independent practice associations 
and for-profit. Enrollees and disenrollees are predominantly female, white, age 65 or 
older, and high school graduates or higher.  The average length of enrollment in the 
sampled   calculated from HCFA data, is somewhat shorter in 1996. 
This inspection was conducted in accordance with the Quality Standards for Inspections 
issued by the Presidents Council on Integrity and Efficiency. 
Disenrollees from the sampled   were about 13 percent of enrolled HMO 
members in 1996. 
4  FINDINGS

SUMMARY  OF  BENEFICIARIES  ASSESSMENTS 
In 1996, beneficiary responses about their HMO experiences present a picture of good 
access to care, improvements since 1993, and improvements needed. In 1996, as in 1993, 
the majority of HMO disenrollees and enrollees reported medical care that maintained or 
improved their health, timely appointments for primary and specialty care, good access to 
most Medicare covered services and to hospital, specialty and emergency care, and 
sympathetic treatment by their   and HMO doctors. Since 1993, improvement is 
evident in the problem areas of inappropriate screening of health status at application, 
difficulty with making appointments by telephone, going out-of-plan for needed services, 
doctors failure to take beneficiaries health complaints seriously, and disenrollees 
perceptions that HMO care made their health worse. In 1996, as in 1993, screening for 
health status at application and beneficiaries awareness of their formal complaint rights 
were problems.  The 1996 data suggest access to emergency/urgent care and 
gynecological services is problematic for some beneficiaries. 
In 1996, the majority of disenrollees and enrollees gave favorable summative ratings, e.g., 
excellent and good, very easy and easy, to their doctors care and   service access 
and value (see Table 1). A difference between the two groups, however, is that for every 
rating question, enrollees favorable ratings were higher than disenrollees ratings. 
Table 1: Beneficiaries Overall Ratings of the  - 1996 
Enrollees  Disenrollees 
Excell.  Good  Fair  Poor/VP  Excell.  Good  Fair 
Care given by  46%    43%    7%  2%  36%  36%  18%  10% 
primary doctor  (956,663)  (864.2681 (144,799 )  (30,588)  (18,766)  (18,634)  (9,157) 
HMO on  46%    46%    7%  1%  29%  40%    18%  14% 
viding  needed  (924,442)  (920,958)  (149,799 )  (21.8351  (14,834)  (20,840) 
services 
V.Easy  Easy  Neither  HardNH  V.Easy  Easy  Neither  HardNH 
HMO rules  make  26%  41%  28%  5 %  22%  30%  29%  20% 
getting needed  (516,590)  (806,715)  (547,420)  (106,754)  (14,956)  (14.4921  (9,980) 
care --
Definite  Probable  Not  Definite  Probable  Not 
Yes  Yes  Decided  No  Yes  Yes  Decided  No 
HMO worth  57%  30%  9%  4%  45%  28%  10%  17% 
premium costs?  (589,533)  (169,840)  (71,928   (23,014)  (14.4761  (8,513) 
5
 HEALTH  AND  FUNCTIONAL  STATUS 
 of self-
 Serious chronic medical conditions -- Based on 1996 beneficiary-reported incidence 
of serious chronic medical conditions, 49 percent of disenrollees and 46 percent of 
enrollees had no serious chronic health problems (see Table D-l).  The most frequently 
reported problems were heart attack/heart condition (14   diabetes (10   lung problems 
(7   broken bones (6   cancer, excluding skin cancer (6   and stroke (5  About 
one-third reported one serious chronic health problem; another 17 percent reported having 
2 or 3 serious health problems.  By excluding diabetes, lung problems and an other 
category, all of which were not part of our 1993 data, responding beneficiaries from 1996 
and 1993 appear similar in health status based on serious chronic medical   In 
1996, with these conditions excluded, 76 percent of disenrollees and 71 percent of 
enrollees reported no serious chronic health problems. Our comparable 1993 survey data 
showed no serious chronic health problems for 69 percent of disenrollees and 67 percent 
of enrollees. 
 Functional limitations -- In 1996, disenrollee and enrollee responses on health and 
functional limitations, such as problems with climbing stairs or bathing, indicate that most 
beneficiaries were able to perform well. A substantial majority of disenrollees (71%) and 
enrollees (68   had none of these functional limitations.  The most frequently reported 
functional limitations were problems with walking several blocks (27   carrying or 
lifting groceries (19   climbing one flight of stairs   and bathing or showering 
(7%). About 10 percent had one functional limitation; another 14 percent reported two or 
three limitations. 
Sickest, most functionally limited, and disabled beneficiaries -- Of the categories of 
beneficiaries whose self-reported data indicated they were the most ill, functionally 
limited, or disabled by Medicare standards, 38 percent of disenrollees and 41 percent of 
enrollees were in at least one  We classified beneficiaries as the most 
chronically ill if they reported at least one condition from the list of heart condition, heart 
attack, cancer, kidney failure, stroke or diabetes, and as the most functionally limited if 
they reported at least one limitation from a list of most basic activities of daily living, 
e.g., problems with bathing or showering, or using the toilet. Many disenrollees (43 %) 
and enrollees (41%) said they had neither serious chronic health problems nor functional 
limitations. 
Overall, both disenrollees and enrollees reported worsened health over time, but the rate 
of perceived decline was greater for disenrollees (Table 2). At enrollment, disenrollees 
and enrollees appeared similar in health status.  For example, 71 percent of disenrollees 
and 75 percent of enrollees rated their health as excellent to good; 5 percent and 4 
6  percent, respectively rated   health as poor to very poor. When we surveyed them, 
disenrollees (63   and enrollees (69   reports of excellent to good health were 
significantly different. Also, disenrollees (11%) were more likely than enrollees (5   to 
report poor to very poor health. 
Table 2: Beneficiary Self-Reported Changes in Health Status  1996 
Enrollees  Disenrollees 
Excellent  Fair  Poor to  Excellent  Fair  Poor to 
to Good  Very Poor  to Good  Very Poor 
Health at  75%  21%  4%  71%  24%  5% 
enrollment  (455,069 )  (92,792)  (42,740)  (14,288) 
Health at time of  69%  26%  5%  63%  26%  11% 
survey  (497,630 )  (103,983)  (28,344)  (11,800) 
In 1996, 67% of enrollees and 61% of disenrollees had been enrolled in the sampled   for more 
than 12 months. The average enrollment length was 21 months for disenrollees and 34 months for 
enrollees. 
 of 
 for 
In 1996, nearly all enrollees (97%) and most disenrollees (89%) reported that their 
 medical care caused their health to improve or stay   same.  Enrollees (43 
were more likely than disenrollees (30%) to report improved health due to their HMO 
care.  When beneficiaries said their health worsened due to their   care, 
groups most frequently cited problems with timeliness of or access to treatment as the 
reasons for worsened health. In 1996, disenrollees (11%) were more likely than enrollees 
(3   to report worsened health. Nevertheless, compared to 1993 rates, disenrollees 
responses showed marked improvement from worsened health (23 % to 11%) to 
maintained health (43 % to 59 
Table 3: Effect of HMO Care on Beneficiaries Health 
Enrollees  Disenrollees 
1993  1996  1993  1996 
Medical care received through the HMO 
caused their health to: 
 improve  53%  43%    34%  36%   
(498,298)  (847,873)  (7,239)  (14,247) 
 stay the same  45%  54%  43%    59% 
(423,270)  (9,335)  (28,500) 
  worsen  2%  3%  23%  11% 
(17,524)  (50,343) - (4,951)  (5,451) 
7
 FEDERAL  HMO  REQUIREMENTS 
  for 
With the exceptions of   and the election of hospice care, Federal regulations 
prohibit   from denying or discouraging enrollment based on a beneficiarys health 
status.   must also adequately inform beneficiaries about lock-in to the HMO and 
other restrictions they may use for managing services, such as using primary physicians as 
gatekeepers for other services.  The majority of beneficiaries indicate that their 
have followed Federal enrollment standards, but some beneficiaries recollections and 
perceptions indicate weaknesses in enrollment procedures and in beneficiary understanding 
of lock-in and the role of primary physician as gatekeeper.  Basically, the enrollment 
experiences of enrollees and disenrollees were similar in 1996. 
Table  4:  Enrollment  Experience 
Disenrollees  Enrollees 
1993  1996  1993  1996 
Were asked at application about health  48%    20%  43%    18% 
problems,  excluding  kidney  failure  and  (313,060)  (237,335 ) 
hospice  care. 
Were required to have a physical  1%  3%  1% 
examination before joining HMO.  1%)  (25,827)  (15,165) 
Didnt know they could change their minds  15%  15%  8%  9% 
about  enrolling  after  they  applied.  (3,446)  (6,273)  (75,186)  (112,609) 
Didnt know, from the beginning, they: 
 needed a referral from their primary  17%  14%  10%  14% 
HMO doctors to see a specialist.  (8,082)  (110,631)  (283,724 ) 
 could only use HMO doctors and  6%  6%  4% 
hospitals  (except  emergent  care  and  (1,665)  (3,427)  (38,972)  (1045.0;6591 
urgent care outside the service area). 
Screening for health status at application -- Table 4 illustrates how   may have 
improperly screened Medicare applicants based on their health status.   In 1996, 18 
percent of all beneficiaries, who could remember, said they were asked at application 
about their health problems, excluding kidney failure and hospice care. However, only 
two beneficiaries, less than 1 percent of beneficiaries who had been asked about health 
problems, felt that an HMO representative tried to discourage them from joining because 
of their health problems.  One percent of beneficiaries reported a physical examination 
was required before they could join the HMO, an event that is specifically  A comparison of the 1993 and 1996 survey data shows the proportion of beneficiaries that 
reported being asked about their health problems at application decreased significantly. 
We can suggest two reasons for   decrease.  The first is that   reduced 
frequency of these improper screenings.  The second is that our slight wording change in 
the survey questions helped the respondents to focus better on the application process 
rather than on a possible post-enrollment health assessment by the HMO. 
Understanding of HMO rules at application -- Another continuing problem with 
enrollment procedures is beneficiaries understanding of HMO rules for obtaining 
services. In 1996, of   beneficiaries who could remember, 15 percent of disenrollees 
and 9 percent of enrollees said they didnt know they could have changed   minds 
about enrolling after they applied. Also within this group, 14 percent of both disenrollees 
and enrollees didnt know from the beginning they would need referrals from their 
primary HMO doctors to receive specialty care.  A smaller proportion of enrollees (5%) 
and disenrollees (6%) reported not knowing from the beginning they were locked-in to 
HMO doctors and hospitals, except for emergent care and urgent care outside the service 
area. From 1993 to 1996, enrollees and disenrollees responses concerning 
understanding of HMO rules changed very little. 
 of   of 
 of   of 
 of   of 
Federal guidelines require Medicare risk   to adequately inform beneficiaries about 
appeal and grievance procedures, but beneficiary responses show a substantial proportion 
of them were unaware of their rights (see Table 5). 
Table 5: Awareness of Appeal and Grievance Rights 
Enrollees  Disenrollees 
1993  1996  1 9 9  3  1 9 9  6 
Didnt know they had right to file formal  25%  27%  31%  35% 
complaint about HMOs refusal to provide  (243,871)  (527,146)  (6,753)  (18,778) 
or pay for services (appeal). 
Enrollees 1996  Disenrollees 1996 
Didnt know they had right to file formal  28%  40%   
complaint about other HMO problems, e.g.,  (544,016)  (20,864) 
quality of care, waits for appointments 
(grievance). 
Knew about appeal or grievance rights, but  7%  7% 
-not about both. (125,276) 
Didnt know about appeal   grievance  24%  34%   
rights.  (460,052)  (17,506) 
9
 Disenrollees were significantly less aware of their appeal and grievance rights than 
enrollees.  In 1996, 35 percent of disenrollees and 27 percent of enrollees were unaware 
of their appeal rights. The 1996 rates are similar to those for 1993. Additionally, in 
1996, 40 percent of disenrollees and 28 percent of enrollees didnt know they could make 
formal complaints (grievances) about HMO medical service problems, such as quality of 
care or long waits for appointments.   Finally, in 1996, a total of 41 percent of 
disenrollees and 31 percent of enrollees lacked complete understanding of their rights to 
formally  complain.  Thirty-four percent of disenrollees were unaware of both appeal 
grievance rights compared to 24 percent of enrollees.  Another 7 percent of disenrollees 
and enrollees didnt know about appeal   grievance rights. 
A 1996 OIG report focusing specifically on 1995 HMO appeal and grievance processes 
provides additional insight into beneficiaries   In that study, the OIG 
found that 86 percent of respondents were currently aware of their general right to make a 
formal complaint about their HMO care or services, but only 66 percent knew they could 
complain when they first joined the HMO.  Beneficiaries were even less aware of specific 
instances for which   might exercise their appeal and grievance rights. For example, 
of beneficiaries didnt know they could formally complain about their not being provided 
Medicare-covered services   their physicians not taking their health complaints 
seriously (40   or encountering delays in seeing a primary physician (46   or a 
specialist (43  While not directly comparable because of differences in survey 
questions,   this study and   OIG study referenced above together suggest that many 
beneficiaries dont know about their right to file formal complaints, and that this trend has 
not improved from 1993 to 1996. 
 beneficiaries dont know about   appeal and grievance rights is unclear. 
However, a related 1996 OIG review of marketing and enrollment materials from 132 
Medicare risk   having at least 450 enrollees found 37 (28%)   included no 
information on either appeal or grievance processes in these materials.   Also, an on-site 
case review at 10 Medicare risk   showed that for 39 cases   distributed 
across 8 of the 10   the   lacked evidence of informing beneficiaries about 
their appeal rights in initial  While these data are not projectable to all 
Medicare risk   they do indicate some reasons for beneficiaries lack of awareness. 
 of   of 
 of 
In 1996, we expanded our questions on beneficiaries awareness of   complaint rights 
to include their perceptions of the fair handling of complaints, and reasons for not filing 
complaints (see Table 6). Respondents for these questions fell into   groups: aware 
of their rights, but had not filed a formal complaint (72%); aware and had filed a formal 
complaint (3   not aware of   rights (25  Table 6: 1996 Complaints -- Reasons for Not Filing and HMO Fairness 
All  Enrollees  Disenrollees 
Were aware of rights, but had   filed a formal  72%  72%  59% 
complaint about the HMO.  (30,610) 
Of these, didnt file a complaint because: 
 no problems with HMO  96%  96%  81% 
(17,769) 
 left the HMO instead  1%  1%  13% 
(8.833)  (5,917) 
Were aware of rights and had filed a formal complaint  3%  3%  7% 
about the HMO:  (62,204)  (58,442)  (3,762) 
Of these, HMO did not handle formal complaint fairly.  36%  36%  42%   
 9,302)   8,022)   ,280) 
Werent aware of right to file formal complaints.  25%  25%  34% 
(521,776)  (503,844)  (17,932) 
Of these, would have filed if had been aware.  55%  55%  55% 
(234,758)  (227,361) 
In general, enrollees were less critical of   HMO experiences in these areas 
disenrollees.  Enrollees (72%) were more likely   disenrollees (58   to report they 
were aware of   rights, but they had   filed a formal complaint.  More enrollees 
didnt formally complain because   said   didnt have problems with their 
(96%) compared to disenrollees (81%). Interestingly, 13 percent of disenrollees said they 
left the HMO instead of filing a formal complaint.  A small proportion (1% to 2   of 
both enrollees and disenrollees mentioned they didnt know how to file a complaint, or it 
was too much trouble to file one. 
Beneficiaries noted two other serious concerns with making formal complaints.  Of the 
disenrollees (34%) and enrollees (25   who were not aware of their appeal and grievance 
rights, 55 percent of both groups said they would have filed a formal complaint if they 
had known their rights.  Finally, disenrollees (7%) were more likely than enrollees (3 
to file a formal complaint, but a sizable proportion of   enrollees (36%) and 
disenrollees (42%) who had filed perceived that their   had not handled their 
complaints  fairly. 
ACCESS: APPOINTMENTS FOR SERVICES 
In 1996, most disenrollees and enrollees said they received timely appointments measured 
by days elapsed before a scheduled appointment or time spent in an office waiting to see a  doctor (see Table D-3).  The majority of disenrollees and enrollees reported getting 
appointments within 1 to 2 days when they believed   were very sick, scheduling 
appointments with primary care doctors and specialists within 8 days or less, and usually 
waiting less than a half-hour in the office and examination room before seeing the doctor. 
Responses about timely appointments   primary HMO doctors were similar in 1993 
and 1996. 
However, a sizable group of disenrollees and enrollees reported waiting from 13 to more 
than 20 days for scheduled appointments.  Waiting this long for appointments with their 
primary HMO doctors were 13 percent of both disenrollees and enrollees, and 19 percent 
and 18 percent respectively for appointments with specialists.  These data suggest that 
some disenrollees and enrollees had better access to physician care for more acute 
conditions   for health maintenance or preventive care.  High percentages of both 
groups (85 % and   respectively) reported being able to see a doctor quickly when 
 were very sick. 
In 1996, disenrollees did not fare as well as enrollees in two categories of timely 
appointments -- quickly scheduled appointments for very sick beneficiaries and time spent 
waiting in the office and examination room to see   doctor.  Of those who said they had 
been very sick, disenrollees (15   were much more likely than enrollees (4%) to say they 
didnt get an appointment within a day or two.  Disenrollees also reported longer waits in 
the office and examination room to see their primary HMO doctors; disenrollees (25%) 
were much more likely than enrollees (13   to wait a half-hour to more   one hour. 
Busy telephone lines continue to hinder some beneficiaries access to services (see Table 
7). In 1996, disenrollees (16%) reported encountering consistently busy telephone lines 
more often than enrollees (10   and said they sometimes gave up trying to make 
appointments more often (12% vs. 6   However, the rates beneficiaries report for busy 
lines and giving up on appointments have improved substantially since 1993. 
Table 7: Appointments by Telephone  II 
Enrollees  Disenrollees 
1993  1996  1993  1996 
Reported busy lines all to most of the time.  20%  10%  37%  16% 
(111,691)  (197,804) 
Sometimes gave up on making  11%  6%  17%  12% 
appointments due to the busy lines.  (65,141)  (73,195)  (2,627)  (4,721)  ACCESS: MEDICAL SERVICES AND OUT-OF-PLAN CARE 
In 1996, a large majority of enrollees and disenrollees believed their primary HMO 
doctors provided the necessary care (see Table 8). Their responses consistently indicated 
good access to Medicare covered services, hospital admission and specialty care. 
Table 8: Services Through Primary HMO Doctor 
Enrollees  Disenrollees 
1993  1996  1993  1996 
Primary HMO doctor never failed to provide  97%  97%  78%  88% 
Medicare covered services that were  (924,590)  (18,494)  (45,168) 
needed. 
Enrollees 1996  Disenrollees  1996 
Primary HMO doctor never failed to admit  98%  95% 
to hospital when needed.  (22,474) 
Primary HMO doctor never failed to refer to  95%  86% 
 when needed.  (33,310) 
Primary HMO doctor usually explained all  90%  77% 
wavs health   could be treated.  (33.286) 
However, in four instances, disenrollees reported a significantly greater degree of access 
problems.  First, disenrollees (12%) more often said than enrollees (3   that their 
primary HMO doctors failed to provide Medicare-covered services. Nevertheless, 
disenrollees perception of a problem has improved since 1993. Second, of the 1996 
beneficiaries who believed   needed to see a specialist, disenrollees (14%) were more 
likely than enrollees (5%) to report   doctors failed to make necessary referrals to 
specialists.  Third, of the beneficiaries who had health problems, disenrollees (23   were 
much more likely   enrollees (10%) to say   primary HMO doctors didnt explain 
all treatment options to them.  Their responses on treatment options may relate to their 
perceptions of their doctors concern with costs and failure to take their health complaints 
seriously.  They tended to say more often than other beneficiaries that their doctors didnt 
take their health complaints seriously and that   doctors and   seemed to be more 
concerned   the cost of care (see Behavioral Barriers to Services on page 17). 
In 1996, disenrollees also reported greater problems with being seen by only a member of 
the doctors staff (see Table D-4).  Sixteen percent of disenrollees who had a doctors 
appointment said they were seen instead by a nurse or technician compared to only 7 
percent of enrollees.  Of these, sizable proportions of both disemollees (53%) and 
13  enrollees (41%) reported not seeing the doctor at visits from 2 to more than 3 times in the 
last 6 months. 
Another measure of medical service access is the rate of access to routine preventive and 
screening  services.  In 1996, we asked   which of these services they had been 
offered by their HMO doctors or  We chose services offered over services 
received as a more liberal method of assessment.  We also filtered out   beneficiaries 
who had not seen a doctor or had not received any services through the HMO while a 
member   We then compared the reported rates to the goals outlined in Healthy People 
2000 (see Table D-6).  Because of differences between the questions we asked and the 
measurements for the goals of Healthy People 2000, these comparisons provide only 
general  assessments. 
According to the beneficiary-reported data,   exceed several national goals for 
certain preventive and screening services, but fall short for others. The beneficiary-
reported rates of offers for mammograms and prostate cancer screening already meet or 
exceed the goals.  The reported rates for influenza and pneumonia immunizations, are 
lower than the   goals, especially the pneumonia immunization. The reported rates for 
blood cholesterol and colon cancer screening are probably below the 2000 goal. The 
blood cholesterol rate is, however, higher than the 1992 interim progress rate while the 
colon cancer screen is lower.  The reported rate for offering Pap tests appears to be lower 
than the 2000 goal, but we have no data on the proportion of sampled women with uterine 
cervix. 
A small, but notable group, are the disenrollees (7%) and enrollees (5   who reported 
 being offered none of the preventive or screening services.  Even among those 
beneficiaries enrolled for over a year, 6 percent of disenrollees and 5 percent of enrollees 
still said none of the services were offered. 
The most striking difference between disenrollees and enrollees is in their responses for 
the offer of Pap tests and mammograms.  Overall, enrolled women were more likely than 
disenrolled women to say they had been offered a Pap test (58% vs. 50%) or a 
mammogram (7 1% vs. 60   in the last year of membership.  The difference in rates is 
even wider between disenrolled and enrolled women who were members for a year or 
less.  The reason for this difference is unknown, but the timing of the offer for these 
services by some   i.e., close to enrollment versus well after enrollment, may be a 
factor. 
The rates of offering other routine preventive and screening services is closer between 
disenrollees and enrollees. Disenrollees and enrollees reported, at similar rates, the offer 
of screening for prostate cancer, blood pressure reading, blood cholesterol screening and  flu shots.  Disenrollees who were members for a year or less reported the lowest rates for 
an offer of colon cancer screening. 
In 1996, of the beneficiaries who needed non-routine services in the last 6 months (73 %), 
13 percent reported some problems with getting them due to the   pre-approval 
process (see Table D-5). Non-routine services in this category include referrals to 
specialists, physical therapy and the more expensive diagnostic tests, such as a CAT 
 Disenrollees (24%) were more likely than enrollees (13   to say   had 
experienced delays in receiving non-routine services due to the HMO pre-approval 
requirement. By far, the most frequently mentioned service for which both disenrollees  

(69   and enrollees (63   experienced delays was a specialist referral, followed by waits 
for approval of physical therapy (24%) and special diagnostic tests (17  Most 
beneficiaries who had problems getting non-routine services reported this happened 1 or 2 
times in the last 6 months. Disenrollees (10%) were more likely than enrollees (2%) to 
say they had waited for HMO approval 5 or more times in the last 6 months. 
Disenrollees (27%) were also more likely than enrollees (14%) to report waiting 3 weeks 
or longer for approval. 
In 1996, excluding dental, routine eye, and emergency/urgent care, 6 percent of 
beneficiaries reported they had sought out-of-plan care for Medicare covered services 
without prior approval when required (see Table D-7).  Eighty percent of beneficiaries 
who sought out-of-plan care in 1996 had done so 1 to 3 times in the last 6 months. 
Disenrollees (10%) were more likely than enrollees (6%) to go out-of-plan. For 
disenrollees, however, this is a notable drop from the 1993 rate of 22 percent. 
In 1996, needing the care, even if the HMO would not approve it, was the motivation 
most frequently mentioned (32%) by beneficiaries who had gone out-of-plan. This 
suggests that about a third of beneficiaries going out-of-plan perceived service access 
problems and perhaps implies a quality of care issue.  Other reasons related to 
of-plan but not as frequently mentioned by disenrollees and enrollees are not getting 
services quickly enough (11% and 15 %), not getting referrals to a specialist (10 % and 
9   and not being helped by the primary HMO doctor (12% and 8  The second most 
frequently mentioned reason for going-out-of-plan   being temporarily out of the HMO 
service area which was cited by 25 percent of disenrollees and 19 percent of enrollees. 
Finally, disenrollees (20   more often than enrollees (3   said they went out-of-plan 
because they didnt think they would have to pay for it. This clearly illustrates some 
disenrollees misunderstanding of lock-in.  Payment for emergent and urgent care is sometimes a difficult policy area for 
beneficiaries and  While   will generally pay for any required emergency 
care, they will only pay for urgent care from a non-HMO provider outside the service 
area.  Further, beneficiaries are not always able to differentiate between the need for 
emergency and urgent care, or between urgent and non-urgent 
Table 9: Emergent and Urgent Services  1996 
All  Enrollees  Disenrollees 
Used emergent/urgent services while an HMO member.  39%  40%    35% 
(796,742)  (778,465)  (18,277) 
For those who used emergent/urgent services, HMO  10%  10%  20% 
informed them it would not pay  (79,325)  (75,902)  (3,423 ) 
Of all respondents who believed they needed emergent  4%  4%  6% 
or urgent care, those who did not seek it because HMO  (49,970)  (47,859) 
might not pay. 
These complexities have caused access problems for some beneficiaries (see Table 9). Of 
the 39 percent of beneficiaries who said they had used emergent and urgent services while 
a member of the sampled HMO, 10 percent encountered their   refusals to pay. 
Disenrollees (20%) experienced this significantly more often than enrollees (10%). Four 
percent of beneficiaries who believed they needed emergent or urgent care said they did 
not seek it because they thought the HMO might not pay. 
A somewhat controversial, but permissible, aspect of service access is   requiring 
women to have a referral to a gynecologist.  Critics of this requirement would argue that 
gynecological services are an integral part of womens primary health care and should not 
require a referral.  In 1996 we asked women if their   allowed them to see their 
gynecologists without a referral (see Table 10). 
Sixty-one percent of women respondents provided information indicating their awareness 
of their   policy for referral to gynecological services.  Within this group, the 
smallest proportion of 28 percent said their   did not require a referral.  Thirty-five 
percent of the women said a referral was required, but disenrolled women (61%) were 
much more likely than enrolled women (35   to report this.  Finally, 38 percent of 
women didnt know their   referral requirements for gynecological services, with 
enrolled women (37%) much less aware than disenrolled women (16%).  Table IO: Referrals for Gynecological Services  1996 
All  Enrollees  Disenrollees 
Women who answered regarding their awareness of the  61%  61%  51% 
 requiring a referral for gynecological services.  (665,386)  (615,819)   3,667) 
Of these, women who said: 
 referral not required  28%  28%  23% 
(185,050)  (181,843) 
 referral required  35%  35%  61% 
(230,439)  (222,131)  (8,308) 
 dont know  38%  38%  16% 
(249,897)  (247,745)  (2.152) 
Women for whom a referral for gynecological services  39%  38%  49%   
was  not  pertinent:  (420,165)  (407,202)  (12,963) 
 primary doctor is a gynecologist  3%  3%  3% 
(10,684)  (10,239) 
 uses primary doctor for all health care  33%  33%  16% 
(137,087)  (134,993) 
 didnt need to see a gynecologist  64%  65%  80% 
(272,394)  (261,970)  (10,424) 
For the remaining women respondents   referral for gynecological services was 
apparently not an issue.  Of these women, 64 percent said they didnt need to see a 
gynecologist. Interestingly, disenrolled women (80%) were much more likely than 
enrolled women (64%) to believe that. These womens answer is a serious health concern 
because both the National Cancer Institute and the Healthy People 2000 project 
recommend regular gynecological care and tests for older   Thirty-one percent 
of these women used their primary doctors for all health care, and a few (3   had a 
gynecologist for a primary HMO doctor. 
ACCESS:  BEHAVIORAL  BARRIERS  TO  SERVICES 
Unsympathetic behavior of primary HMO doctors, their staffs and HMO office staff can 
subtly or directly restrict beneficiaries access to medical services.  Examples of this 
behavior are not taking health complaints seriously, showing undue concern about 
treatment costs, or encouraging a beneficiary to leave the HMO.  As mentioned 
previously, some beneficiaries seemed to relate problems with full explanations of 
treatment options to their perceptions of their doctors concern with costs and failure to 
take their health complaints seriously (see page 13).   of 
In 1996,  disenrollees (19   were more likely than enrollees (7   to believe their 
primary HMO doctors did not take their health complaints seriously (see Table 11) 
Substantial proportions of both disenrollees (40%) and enrollees (28 %), who didnt feel 
they were taken seriously, said they encountered this attitude all to most of the time. 
From 1993 to 1996, the proportions of disenrollees and enrollees believing they were not 
being taken seriously declined significantly. However, the rates of those experiencing this 
problem all to most of the time remained high.  In 1996, the two behaviors reported most 
often by both disenrollees and enrollees as indicative of their doctors attitudes were their 
seeming not to listen and blaming the beneficiaries health problems on their age.  About 
a third of disenrollees and a fourth of enrollees also mentioned their doctors seemed to be 
impatient with them, not letting the beneficiaries fully explain their concerns, and not 
examining them. 
Table 11: Doctors Behavior Regarding Health Complaints 
Enrollees  Disenrollees 
1993  1996  1993  1996 
Primary HMO doctor did not take health  12%  7%  39%  19% 
complaints  seriously.  (108,855)  (13,874)  (8,868)  (9,383) 
Didnt take complaints seriously all to most  36%  28%  44%    40%   
of the time.  (32,760)  (33,049)  (3,318) 
Enrollees 1996  Disenrollees  1996 
When primary HMO doctor didnt take 
complaints  seriously, 
 seemed not to listen  45%  50% 
 1,449)  (4,327) 
 blamed health problems on beneficiarys  36%  47%   
(41,788)  (4,104) 
 seemed impatient  25%  36% 
(28,388)  (3,104) 
 wouldnt let beneficiary fully explain  26%  33% 
concerns  (29,832)  (2,856) 
 didnt examine beneficiary  23%  31% 
(26,885)  The majority of beneficiaries reported they believed their primary HMO doctors and 
 emphasized providing the best medical care over holding down the cost of care 
(see Table 12). However, a substantial minority perceived an emphasis on containing 
costs.  In 1996, disenrollees were more likely than enrollees to say that holding down the 
costs was most important to their primary doctors (15 % vs. 7   and   (27 % vs. 
15  Both disenrollees and enrollees seemed to believe that cost concerns were more 
important to their   than to their primary HMO doctors. Between 1993 and 1996, 
beneficiaries beliefs about what was important to their   and doctors changed little 
(see Table B-2). 
Table 12: Cost of Care vs. Best Care Possible 
Enrollees  Disenrollees 
1993  1996  1993  1996 
Most important to your primary HMO 
doctor is: 
 holding down cost of care  10%  7%  28%  15% 
(94,695)  (142,064)  (6,460)  (7,655) 
 giving best medical care possible  73%  74%  47%  57% 
(7 16,623)   0,927)  (29,309) 
 dont know  12%  16%  24%  25% 
(120,819)  (312,089)  (5,564)  (12,876) 
Most important to your HMO is:* 
 holding down cost of care  11%  15%  35%  27% 
(108,364)  (300,595)  (13,689) 
 giving best medical care possible  67%  62%  39%    43 % 
(667,057)  (9.016)  (22,369) 
 dont know  12%  16%  20%  24% 
(120,709)  (318,857)  (4,609)  (12,384) 
 The column does not total 100% as a small proportion of beneficiaries answered that both holding 
down cost of care and giving best medical care possible were most important. 
 few 
A small group of beneficiaries reported having felt at sometime during their membership 
that their   or primary HMO doctors wanted them to leave.  Disenrollees  (7%) 
reported encouragement to leave more often than enrollees (1%). Interestingly, 
disenrollees (4%) most often said they were being encouraged to leave because they would 
probably receive better care outside the HMO.  Disenrollees also felt their   or 
HMO doctors wanted them to leave because they were too sick to be in the HMO (1 
the medical care they needed was too expensive (2   or they asked for too many services  or appointments (2%).  Of the beneficiaries who felt they had been encouraged to leave, 
39 percent said someone, nearly always their doctors, had actually told them they should 
leave their 
FUNCTIONALLY LIMITED, DISABLED AND CHRONICALLY ILL HMO 
BENEFICIARIES 
A review of recent literature strongly indicates that a separate analysis of seriously or

chronically ill and disabled HMO members is required for a complete understanding of

HMO medical care.  Because they use the health care system more often and cost more to

care for, the less healthy members have a more experienced view of that system than

healthy members and are more vulnerable to cost saving strategies employed in managed

 Further, a recent medical outcomes study found patients with chronic

illnesses had worse outcomes in   than in fee-for-service, but, similar differences did

not exist between HMO and fee-for-service outcomes for a healthier   Also

of concern is the tendency for Medicare HMO enrollees to be healthier than beneficiaries

in fee-for-service and for less healthy beneficiaries to be over-represented in the HMO

disenrollee 
We classified disenrollees and enrollees as functionally limited or chronically ill by using

their self-reported health and functional status.  Disabled beneficiaries met the

Medicare disability criteria and were younger than age 65. The sub-populations of

functionally limited and disabled beneficiaries are not the same, although some overlap

 The sub-population of the chronically ill, as we have defined them, is very

broad in terms of their illnesses.  More significant differences in access to services may

appear when we analyze the data by individual illnesses or conditions.  We plan to release

a separate, more detailed report illustrating differences between these three groups and

healthier  beneficiaries.

We found statistically significant differences when comparing the experiences of healthier

beneficiaries with those of functionally limited, disabled and chronically ill beneficiaries.

In general, functionally limited and disabled beneficiaries reported more service access

problems than the chronically ill and the healthier beneficiaries.  Compared to healthier

beneficiaries, however, functionally limited and disabled beneficiaries reported no

significant differences in quick appointments when they were very sick, delays in

receiving non-routine services (e.g., referrals to specialists, special diagnostic tests), and

the belief that containing cost was most important to their primary HMO doctors.

 of   of 
 Functionally limited -- Functionally limited beneficiaries, i.e., had problems with 
basic daily activities, reported more problems in accessing medical services through their 
 and their primary HMO doctors than healthier beneficiaries (see Tables E-l and 
20  4).  Functionally limited enrollees (11%) and disenrollees (3 1%) were more likely than 
healthier enrollees (5   and disenrollees (16%) to say that HMO rules and procedures 
made it hard or very hard for them to get the health care they needed.  Concerning their 
primary doctors care of them, functionally limited enrollees were more likely than 
healthier enrollees to say their doctors didnt take their health complaints seriously (16% 
vs. 5   and failed to provide needed Medicare-covered services (8 % vs. 2   . 
Functionally limited enrollees were also less likely to feel their primary HMO doctors had 
explained all treatment options to them (85% vs. 91%). 
Functionally limited disenrollees reported the same significant access problems when 
compared to healthier disenrollees -- health complaints not taken seriously (24% vs. 17 
needed Medicare-covered services not provided (20% vs. 1 1   and all treatment options 
explained less often (69% vs. 79%). In addition, functionally limited disenrollees said 
more often than healthier disenrollees that their primary HMO doctors failed to refer 
to specialists when needed (25 % vs. 12%). Functionally limited beneficiaries reported no 
significant differences for hospital admissions. 
Disabled -- Disabled beneficiaries reported more problems with accessing medical 
services than aged beneficiaries (see Tables E-2 and E-5). Like functionally limited 
beneficiaries, disabled enrollees (24%) and disenrollees (37%) were much more likely 
than aged enrollees (5%) and disenrollees (18%) to say that HMO rules and procedures 
made it hard or very hard for them to get the health care they needed.  Disabled enrollees 
(16   and disenrollees (36%) were also more likely than aged enrollees (4%) and 
disenrollees (13   to report their primary HMO doctors failed to refer them to needed 
specialist services.  Disabled disenrollees also stated more often that their primary HMO 
doctors failed to hospitalize them when needed (19 % vs. 4   Disabled disenrollees 
reported other significant access problems -- health complaints not taken seriously (39% 
vs. 17   needed Medicare-covered services not provided (27 % vs.   and all 
treatment options explained less often (61% vs. 78 
 of 
Chronically ill disenrollees and enrollees fared as well as their more healthy counterparts 
in accessing medical services through their Medicare   with three exceptions (see 
Tables E-3 and E-6). They reported experiences similar to healthier beneficiaries for 
quick appointments when they were very sick, full explanations of treatment options, 
referrals to specialists, having their health complaints taken seriously, and the effect of 
HMO rules and procedures on the ease of obtaining needed health care.  The exceptions 
involved access to physician, hospital and non-routine (e.g., referrals to specialists, special 
diagnostic tests) services.  Chronically ill disenrollees were more likely than healthier 
disenrollees to report that their primary HMO doctors failed to hospitalize them when the 
beneficiaries believed they needed to be admitted (8 % vs. 3  Also, chronically ill 
disenrollees were more likely to say they experienced delays in receiving non-routine 
services (32 % vs. 20  Finally, chronically ill enrollees (5   were more likely than  healthier enrollees (3   to report their primary HMO doctors failed to provide them 
needed Medicare-covered physician services. 
REASONS FOR JOINING AND LEAVING AN HMO 
An important aspect of beneficiaries reasons for joining and leaving Medicare risk 
is the effect of market competition.  As mentioned, the Medicare risk HMO program has 
grown rapidly, increasing from 90 Medicare risk   in February 1993 to 307 in 
October 1997. In addition, Medicare beneficiaries can enroll or disenroll from their 
 at any time.  Medicare   often attract new beneficiaries through enhanced 
benefits, such as offering prescription drug coverage, or reducing the amount of extra 
premiums charged to beneficiaries. 
Analysis of our sampled Medicare risk   confiis increased program growth and 
competition in their geographic areas during 1995 and 1996. During 1995 and 1996, 43 
percent of the sampled   experienced competition from one new Medicare risk 
HMO, 32 percent from two or more.  Overall, the growth of the Medicare HMO program 
resulted in 48 percent of our sampled   competing   four or more other Medicare 
risk   offering services within the same market area. 
During the 1995-96 growth period, Medicare risk   did offer more attractive cost 
and benefit packages.  In December 1994, half of all Medicare risk   charged 
enrollees a premium averaging $32.00 per month, but, by December 1996, only one-third 
of all Medicare risk   were charging an additional premium averaging $13.52 per 
 In the same two-year period, the proportion of Medicare risk   offering 
prescription drug coverage increased dramatically from 38 to 60   Of the 40 
Medicare risk   in our 1996 sample, 31 plans offered a prescription drug benefit, 
and 29 plans did not charge a monthly premium.  Of the   charging a premium, four 
plans charged under $40 a month, six plans charged between $40 to $65 a month, and one 
plan had a monthly premium of over $100. 
Disenrollees and enrollees agreed on the reasons for joining an HMO.  Wanting more 
affordable health care was the most frequently mentioned and most important reason for 
over half of both groups.  Together with affordable health care, three other reasons 
account for over 80 percent of beneficiaries reasons for joining, i.e., HMO coverage of 
services that Medicare doesnt cover, influence of family and friends, and a desire for 
better quality health care.  Table 13: Reasons for Joining a Medicare Risk HMO  1996 
Enrollees  Disenrollees 
Reason  Most  Reason  Most 
Reason&  to Join  Important  to Join  Important 
More affordable health care  68%    54%  70%    55% 
(42,528)  (29,694) 
HMO  covers  services  Medicare  doesnt  37%    14%  38%    15% 
(8 16,334)  (268,676)  (23,266) 
Family/friends recommended HMO  24%  6%  26%  5% 
(109,292)  (15,670)  (2,668) 
Better quality health care  21%  7%  23%  10% 
(457,672)  (139,737)  (14,213)  (5,245) 
Other beneficiary characteristics are consistent with their most important reasons for 
joining an HMO, especially their desire for more affordable health care (see Table D-8). 
Only 28 percent of beneficiaries had been members of another HMO before joining the 
one we sampled.  The majority obtained their medical care from a non-HMO doctor or 
from no regular source.  If the primary goal is to reduce the out-of-pocket costs for 
deductibles and co-insurance while gaining access to a wider array of services, HMO 
membership is a logical choice for many.  Further, over 43 percent of enrollees and 39 
percent of disenrollees paid no HMO premium beyond the regular Medicare Part B 
premium.  Of the beneficiaries who did pay an additional HMO premium, the majority 
paid between $1 and $39 monthly. Interestingly, of the beneficiaries who rated their 
premium rates as expensive, 38 percent of disenrollees and 16 percent of enrollees paid $1 
to $39 monthly. 
 of 
At present, Medicare beneficiaries may disenroll from their managed care plans on a 
monthly basis.  In early 1997, the U.S. General Accounting Office (GAO) suggested that, 
by limiting beneficiaries option to change to fee-for-service except during an official open 
season, Medicare might achieve modest savings on money now spent on services for 
HMO members who change to fee-for service.  The downside of an official open 
season, as GAO acknowledged, is that beneficiaries would lose an important consumer 
protection and might be less willing to enroll in managed care.  HCFA responded that it 
would oppose such a change to the Medicare disenrollment policy. Nevertheless, the 
health provisions of the Balanced Budget Act of 1997 (Public Law 105-33) mandated the 
a more restrictive disenrollment policy beginning on January 1, 2002.  Table 14: Effect of Mandatory One-Year Enrollment - 1996 
All  Enrollees  Disenrollees 
If beneficiary had to stay in the HMO for one year, the 
effect on the enrollment decision would be: 
 more likely to join  34%  34%  22% 
(749,412)  (12,801) 
 less likely to join  17%  16%  33% 
(37 1,062)  (351,497)  (19,565) 
 no effect on decision  49 %  49%    45%   
(26,475) 
In 1996, before the law changed, we asked beneficiaries if their being required stay in the 
HMO for one year would effect their enrollment decisions (see Table 14). The largest 
proportion of disenrollees (45   and enrollees (49   said that such a requirement would 
have no effect on their decision to join an HMO.  However, disenrollees (33   were 
much more likely than enrollees (16%) to say that, under those conditions, they would be 
less likely to join an HMO.  These data suggest that, overall, 17 percent of beneficiaries 
may hesitate to join an HMO if they do not have the option to leave at will. 
 of 
In 1996, 93 percent of enrollees had no plans to leave their   the remainder, an 
estimated 141,773 beneficiaries, either planned to leave or felt they couldnt even though 
they wanted to (see Table D-10).  The plans of 4 percent were based on an anticipated 
move, an administrative reason we discuss further in the next section, or other unspecified 
reasons.  Four percent of enrollees wanted to leave their   but felt they couldnt, 
largely for reasons of affordability, i.e., health care outside the HMO was too expensive 
or non-HMO doctors dont accept Medicare assignment. Compared to 1993, a larger 
a proportion of enrollees in 1996 (93 % vs. 84%) said they were staying with their 
and a smaller proportion (4 % vs. 10%) said they couldnt leave even though they wanted 
to. 
 for 
 of 
Three major categories account for 91 percent of disenrollees most important reasons for 
leaving their  administrative actions   the health care delivery system itself 
 and access to medical services (18   (see Table   Difficulties with 
 See Table D-9 for a more details on disenrollees most important reasons for leaving 
their   .  prescription drug coverage was the main reason for 4 percent of disenrollments; another 6 
percent were due to a general desire for better care or a combination of reasons 
Table 15: Disenrollees Most Important Reasons for Leaving Their 
Percent  Beneficiaries 
ADMINISTRATIVE REASONS (total)  31%  11,262 
HEALTH CARE DELIVERY SYSTEM (total)  42%    15,190 
 Provider problems: doctors/hospitals not conveniently located, no  20%  7,064 
longer with HMO, not enough choice of or disliked doctors/hospitals; 
preferred provider not with HMO 
 Cost only or cost vs. service benefit (excluding Rx) too high; another  8%  2,867 
HMO was better deal 
 Discomfort/dislike of HMO way of doing business; HMO not what  6%  2,026 
expected  based  on  enrollment  information 
 Combination of reasons/other reasons, e.g., other coverage (VA,  9%  3,233 
Medicaid) 
ACCESS TO MEDICAL SERVICES (total)  18%  6,779 
 Poor quality medical care: wrong diagnosis/treatment, treatment  5%  1,778 
delayed/denied/limited, getting sicker/not getting better, hospital 
discharge too soon, seen by personnel other than doctor. 
 Difficulties with appointments, referrals; quality or access  4%  1,512 
compromised by emphasis on cost 
 Not personally well-treated by PCP/HMO personnel (rudeness,  2%  869 
complaints ignored, doctor rushed or disinterested) 
 Combination of or other access problems, e.g., billing disputes or 
HMO slow to pay providers  7%  2,620 
PRESCRIPTION  DRUGS  needed too expensive, not covered; drug  4%  1,301 
coverage may have changed since enrollment 
General desire for better care or combination of reasons among  6%  2,055 
categories 
Administrative reasons for   as we defined them, are business or 
procedural actions to end a beneficiarys HMO membership. They account for nearly a 
third of Medicare HMO disenrollments, but they have little to do, at least ostensibly, with 
HMO health care delivery or access to medical services.  Absence from the HMO service 
area (17%) and changes in membership status, such as changing plans within the HMO 
 were the most frequently reported administrative reasons.  A few disenrollees 
(2%) cited involuntary reasons such as clerical error or an unpaid premium. In 1993, 29 
percent of disenrollees reported ending their HMO memberships for administrative 
reasons, most often because of a planned move out of the service area. 
25  Health care delivery system reasons are related to the HMO infrastructure and ways 
of doing business, and they account for 42 percent of disenrollees most important reasons 
for leaving.  Reasons related to provider problems (20%) is the largest group within the 
category.  Within this category, 9 percent of disenrollees didnt believe they had enough 
choices in HMO doctors or hospitals, or they wanted to use providers not currently 
associated with their  Another 8 percent said they left because their doctors or 
hospitals were no longer HMO providers; some followed their doctors to new 
Nine percent felt their doctors or hospitals were not conveniently located.  In keeping with 
their concerns about affordability and service coverage mentioned earlier, 8 percent of 
disenrollees left because HMO costs or costs versus service benefits were too high. Some 
disenrollees went to other   they perceived as a better deal.  Six percent left for 
reasons related to their discomfort with or dislike of their   way of providing care; 
that is, some felt the HMO rules too restrictive while others found the   were not 
what they expected from the marketing materials in terms of cost, covered services or 
restrictions on services.  In 1993, the choice of primary HMO doctors and high 
beneficiary expenses were the two most important disenrolhnent reasons as well. 
Access to medical services problems accounted for 18 percent of the disenrollees 
most important reasons for leaving their   Five percent reported poor quality 
medical care which includes a technical component (wrong diagnosis or treatment) as  .l 
as service access complaints, such as delayed, denied or limited treatments, or premature 
hospital  discharges.  Four percent encountered difficulty in making appointments and 
securing referrals, and compromised service access or quality due to a emphasis on 
holding costs down. Another 3 percent left because that they were not personally 
treated by their doctors or   which affected their service access.  Seven percent 
mentioned a combination of these or other service access difficulties.  RECOMMENDATIONS

Overall, beneficiary responses about their HMO experiences in 1996 present a picture of 
good access to care, and program improvements since our 1993 beneficiary survey. In 
1996, as in 1993, the majority of HMO disenrollees and enrollees reported medical care 
that maintained or improved their health, timely doctors appointments, and good access to 
most Medicare-covered services. Since 1993, improvement is evident in the problem 
areas of inappropriate screening of health status at application, difficulty with making 
appointments by telephone, going out-of-plan for needed services, doctors failure to take 
beneficiaries health complaints seriously, and disenrollees perceptions that HMO care 
made their health worse. 
A comparison of our 1993 and 1996 data also shows, however, that several problems have 
persisted with beneficiaries understanding of and accessing services in the Medicare risk 
HMO program. While we initially recommended these same improvements, with HCFA 
concurrence, in 1995 based on our 1993 data, our 1996 data indicate these issues remain 
important today. Therefore, we strongly urge HCFA to make a concerted effort to 
and, perhaps intensify, its oversight of the Medicare risk HMO program in conjunction 
with its on-going improvement efforts. Other recent OIG reports, dealing specifically 
with problems in Medicare appeal and grievance   and with Medicares 
oversight of HMO performance and implications for Regional   support and 
amplify the following six recommendations: 
 should be more closely monitored to assure that they properly inform 
beneficiaries about their appeal and grievance rights. In 1996, as in 1993, a 
substantial group of beneficiaries did not know about their appeal and grievance rights. 
Of the beneficiaries who did not know about their right of formal complaint, over half 
said they would have filed if they had known.  We believe that beneficiaries 
understanding of appeal and grievance rights is extremely important considering the 
lock-in and gate-keeper features of HMO enrollment and potential problems with 
service access.  The facts that 7 percent of HMO beneficiaries perceived their primary 
HMO doctors did not take their health complaints seriously, and 15 percent thought 
that holding down the cost of care was most important to their   further 
underscore this issue. 
Beneficiaries should be better informed about HMO procedures for obtaining 
services. Adequately informing beneficiaries about lock-in and the primary 
physicians role as gatekeeper is a Federal requirement.  Failure to inform them can 
lead beneficiaries to incur medical expenses that Medicare will not cover and/or to 
disenroll from their  From the beginning, 14 percent of beneficiaries didnt 
know they needed referrals from their primary HMO doctors to see a specialist, and 5 
percent werent aware they could only use HMO doctors and hospitals except for 
emergent care and urgent care outside the service area. 
27
 Service access problems encountered by functionally limited, disabled, and 
chronically ill beneficiaries should be identified and carefully monitored, as they 
are especially vulnerable. In 1993, we reported that 
most often reported access problems in several crucial areas of their HMO care. 
Many   enrollees wanted to leave their  In this report, the 
beneficiaries with more serious health conditions and with functional limitations in 
activities of daily living, as well as disabled beneficiaries, are reporting the same types 
of problems with their care. 
Medicare risk   should be monitored for inappropriate screening of 
beneficiaries health status at application. In 1996, 18 percent of beneficiaries 
reported being asked at application about their health problems.  While this is an 
impressive drop from the 1993 rate of 43 percent, it indicates the possibility of 
ongoing health screening and selective enrollment by 
HCFA should systematically collect and track over time HMO-specific 
reported data on access to medical services through their   and reasons for 
disenrolhuent. Such HMO-specific data could strengthen information given to 
beneficiaries in making decisions about HMO enrollment. In addition, the data could 
be a powerful management tool that allows the development of performance standards 
and trends over time and the ability to judge if problems are pervasive or confined to 
specific  We also recommend the data collection cover the specifics of the 
process and experience of accessing services through the   rather than merely 
relying on general ratings or satisfaction scales. 
*  HCFA should distinguish between administrative and non-administrative 
disenrolhuents. Thirty-one percent of disemollees left their   for administrative 
reasons such as moving from the service area or being switched between plans within 
the HMO.  These reasons have little to do with   health care delivery or access 
to medical services.  If HMO disenrollment rates are to be used as performance 
indicators, as GAO has  to avoid misinformation HCFA should either 
exclude administrative disenrollments from their consumer information or treat them 
separately. 
The 1996 survey data also suggest the need for improving womens health care. 
HCFA should take steps to better inform older women about gynecological 
services and health. While we developed this recommendation from an HMO 
beneficiary survey, the educational need it suggests may be pertinent to all Medicare 
women.  Among all women respondents, 23 percent didnt know if their 
required a referral to see a gynecologist. While this appears to be a specific instance 
of their being uninformed about HMO procedures, it may also indicate the women 
dont know because they havent tried to make appointments for gynecological 
services.  In fact, another 25 percent of the women said they didnt need to see a 
gynecologist. However, the National Cancer Institute recommends that older women 
should regularly have pelvic examinations and Pap tests. Further, for Pap tests, there 
28  is no upper age limit, and hysterectomy is not a reason to discontinue them.  Finally, 
 Healthy People   goals suggest a mammogram every 2 years. 
Additional Office of Inspector General Work 
Another Inspector General report in progress is also intended to assist HCFA in its 
examination and management of HMO issues.  From this survey data we are completing a 
more in-depth analysis of how the functionally limited, disabled, and chronically ill 
beneficiaries perceive their access to needed care and services through 
29
 A G E N C Y C O M M E N TS

Health Care Financing Administration 
We received comments from the Health Care Financing Administration (HCFA) on this 
report.  HCFA concurred with all of the reports recommendations, listing for each the 
improvement strategies already in place or under development.  The full text of 
comments is in Appendix F. 
30
 1.	 This excludes the effect of the point-of-service option which was relatively new for 
the Medicare program at the time we completed the data collection phase of our 
study. 
2.	 Medicare Managed Care Plans,  October 1997, a monthly report prepared by 
Office of Managed Care, HCFA. 
3.	 In recent years, HCFA has begun to broaden the range of service delivery options 
within the Medicare managed care program. In October 1995, HCFA issued 
guidelines to   on offering a point-of-service (POS) option to Medicare 
enrollees. The POS benefit increases flexibility for Medicare HMO enrollees by 
allowing them to seek care outside the HMOs provider network, typically with 
higher cost-sharing, i.e. the HMO will provide partial reimbursement for 
network services. In January 1997, HCFA launched the Medicare Choices 
demonstration project designed to provide beneficiaries a wider variety of managed 
care plans and to extend managed care options to rural areas.  The  demonstration 
plans include four provider sponsored networks, a preferred provider organization 
and a triple option hybrid that lets members see gatekeeper physicians, other 
plan providers without a gatekeeper referral, or providers outside the plan. 
4.	 Beneficiary Perspectives of Medicare Risk   (OEI-06-9 l-00730), 
Medicare Risk HMO Performance Indicators (OEI-06-91-00734) 
5.	 HMO Customer Satisfaction Surveys,    OEI-02-94-00360 
Medicare HMO Appeal and Grievance Processes Overview,   OEI-07-94-00280 
Medicare HMO Appeal and Grievance Processes: Beneficiaries Understanding, 
OEI-07-94-0028  1 
Medicare HMO Appeal and Grievance Processes: Survey of 
OEI-07-94-00282 
Medicare HMO Appeal and Grievance Processes: Review of Cases, 
OEI-07-94-00283 
6.	 We excluded diabetes, lung problems and an other category of serious health 
problems so that we could compare our 1993 and 1996 data. In 1996, other 
conditions beneficiaries considered serious included problems with hypertension, 
arthritis and joints, circulation, vision, prostate, gall bladder, Alzheimers disease 
and  Parkinsonism. 
7.	 Disenrollees reported 25 percent had at least one of the most serious conditions, 20 
percent had at least one functional limitation in the most basic activities of daily 
living, and 7 percent were disabled. Enrollee reports for the same categories were 
31
 29 percent in most ill, 18 percent most functionally limited, and 4 percent were 
disabled. 
8.	 These data exclude the responses from beneficiaries who joined the sampled HMO 
through their or their spouses work (12 
9.	 The length of enrollment in the HMO did not seem to affect beneficiary responses. 
The proportion of beneficiaries reporting health questions and required physical 
examinations at application was nearly the same for beneficiaries who had been 
enrolled for more than 12 months and for 12 months or less. (   12 months, 
and 7) 
10.	 An additional concern is that these indicators are based only on responses from 
beneficiaries who did enroll in an HMO. We cannot know, for this study, the 
experience of those who considered HMO membership, but did not enroll. 
11.	 In 1993, we specifically asked beneficiaries about their experiences at application. 
However, some   conducted a health assessment interview shortly after 
enrollment. If some of these responses referred to such health assessments, this 
may have inflated our 1993 data. 
Health questions at application:

(1993) When you applied for HMO membership, were you asked about your

health  problems. Dont count questions about kidney failure or hospice coverage.

(1996) Before you actually joined the HMO, did an HMO representative ask you

about your health problems? Dont count questions about kidney failure or hospice

coverage.

Required physical exam:

(1993) Were you required to have a physical exam before you could join the

HMO?

(1996) Were you required to have a physical exam before the HMO would let you

join?

12.  We did not ask about awareness of grievance rights in 1993. 
13.  Office of Inspector General, OEI-07-96-00281, December 1996. 
14.	 We did not ask, for example, if beneficiaries had general knowledge of their right 
to complain. Instead, we referred to an HMOs refusal to provide or pay for 
services, which is closer to the example of not being provided Medicare covered 
services. 
15.  Office of Inspector General, OEI-07-94-00282, December 1996. 
16.  Office of Inspector General, OEI-07-94-00283, December 1996. 
32
 17.	 Responses about appointments do not include waits for routine annual exams that a 
beneficiary might schedule well ahead of time or routine follow-up visits, such as a 
quarterly check-up. 
18.	 The proportions of beneficiaries who had seen a doctor or had received services 
through the HMO while a member were similar irrespective of their enrollment 
status or length of enrollment. 
Comparison of Beneficiaries Who Received Services 
by Length of Enrollment 
Stratum   12 months  > 12 months 
Enrollees  88.17  95.46 
(83.3 - 92.5)  (89.0 - loo) 
90.85  96.59 
(84.9 - 96.8)  89.7 - loo) 
. 
19.	 Healthy People 2000 - 199.596 Review, National Center for Health Statistics, 
Hyattsville, MD: Public Health Service: Department of Health and Human 
Services, 1996. 
20.	 Additional services in this category are wheelchair or walker (6   non-emergency 
surgery (6   non-emergency hospital stays (4   nurse services   and other 
services such as routine gynecological services, second opinions, diagnostic tests 
such as x-rays, eye and hearing exams (27%). 
21.	 HCFA has instructed risk plans at section 2104.1 of the   Manual that 
emergency services must be, or appear to be, needed immediately.. . . Do not 
retroactively deny a claim because a condition which appeared to be an emergency, 
turns out to be non-emergency in nature.  In section 2105, urgently needed care 
are services required in order to prevent a serious deterioration of an enrollees 
health that results from an unforeseen illness or injury. 
22.	 We probably should not assume cause and effect here.  For example, women may 
say they dont need to see a gynecologist because getting a referral is difficult or 
because of a mistaken belief that they dont need gynecological services because of 
age. 
23.	 Cancer Facts, Cancemet from the National Cancer Institute, last modified in 
March 1994. 
24.	 Some literature indicates this attitude toward the older patient is a problem 
generally and is not necessarily   to one particular care setting. 
33
 25.  Twenty-four percent of disenrollees also said their doctors refusal to order tests 
was an indicator of not taking their complaints seriously compared to 12 percent of 
enrollees. Other category (29% to 30%) includes doctor rushed or did a 
superficial exam, did nothing or seemed to ignore the beneficiary, did not answer 
questions, blamed the complaint on depression, just prescribed medication, said the 
complaints were not serious or important, or refused to make a referral to a 
specialist. 
26.   Paul, Michael   Paula Lozana and Julia  Chronic Care 
Costs in Managed Care,  Health   May/June 1997, pp. 239-247. 
27.   John H., D.B.A, and Francis D. Moore, M.D., The Two Cultures 
and the Health Care Revolution: Commerce and Professionalism in Medical Care, 
Journal of the American Medical Association, 
28.  Ware Jr., John E., Martha S. Bayliss, William H. Rogers, Mark   and 
Alvin R. Tarlov.  Differences in 4-Year Health Outcomes for Elderly and Poor, 
Chronically Ill Patients Treated in HMO and Fee-For-Service Systems,   Journal of 
the American Medical Association,   13: 1039-1047. 
29.  Morgan, Robert O., Beth A. Virnig, Carolee   and Nancy A. Persily , The 
Medicare-HMO Revolving Door -- The Healthy Go In and The Sick Go Out,   The 
New England Journal of Medicine, July 17, 1997, pp. 169-75. 
30.  We classified beneficiaries as chronically ill if they reported at least one condition 
from the list of heart condition, heart attack, cancer, kidney failure, stroke or 
diabetes, and as functionally limited if they reported at least one limitation from a 
list of activities of daily living, i.e., problems with bathing or showering, using the 
toilet, getting in and out of bed, or climbing one flight of stairs. 
31.  Disabled disenrollees and enrollees comprise only 24 percent and 12 percent, 
respectively, of the functionally limited populations. 
32.  Lamphere, Jo Ann, Patricia Neuman, Kathryn Langwell, and Daniel Sherman, 
The Surge in Medicare Managed Care: An Update,   Health   May/June 
1997,   127-133. 
33.  Lamphere, et al., May/June, 1997. 
34.  Four percent of beneficiaries followed their doctors to the sampled HMO.  Other 
reasons for joining given as the most important by 9 percent of disenrollees and 14 
percent of disemollees include HMO membership was part of retirement plan or 
union benefit, less paperwork than regular Medicare, a replacement for services no 
longer available at military bases, or convenient source of medical care. 
35.  U . S . General Accounting Office,  Medicare   Potential Effects of a Limited 
Enrollment Period Policy,  GAO/HEHS-97-50,  February  1997. 
34
 Medicare HMO members who   and change to fee for service tend to use 
more services and more costly procedures than the average beneficiary under fee 
for service. Consequently, Medicare spends more money to serve an HMO 
member who changes to fee for service than it would have paid to the HMO to 
care for that beneficiary. 
36.	 Medicare HMO Appeal and Grievance Processes,   Office of Inspector General, 
OEI-07-94-00280 to OEI-07-94-00283, December 1996. 
37.	 Medicares Oversight of Managed Care: Monitoring Plan Performance, 
96-00190 
Medicares Oversight of Managed Care: Implications for Regional Staffing, 
01-96-00191 
38.	 U.S. General Accounting Office,  Medicare: HCFA Should Release Data to Aid 
Consumers, Prompt Better HMO Performance,   GAO/HEHS-97-23, October 
1996. 
35
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Richardson, David A., James Phillips, Dean Conley, Jr., A Study of Coverage Denial

Disputes Between Medicare Beneficiaries and   Network Design Group, Inc.,

under HCFA Cooperative Agreement No. 17-C-90070/2-01, September 1993.

39
 Riley, Gerald, James Lubitz and Evelyne Rabey,  Enrollee Health Status under Medicare 
Risk Contracts: An Analysis of Mortality Rates,  Health Services Research, June 1991, 
 137-163. 
Rossiter, Louis F., Kathryn Langwell, Thomas T.H. Wan, and Margaret Rivnyak, 
Patient Satisfaction Among Elderly Enrollees and Disenrollees in Medicare Health 
Maintenance Organizations: Results from the National Medicare Competition Evaluation, 
Journal of the American Medical Association, July 7, 1989, 262: 
Rossiter, Louis, Thomas Wan, Kathryn Langwell, James Hadley, Anthony Tucker, 
Margaret Rivnyak, Kenneth Sullivan, John Narcross, fmal analysis report, National 
Medicare Competition Evaluation: An Analysis of Patient Satisfaction for Enrollees and 
Disenrollees in Medicare Risk-Based Plans,   April 1988, Williamson Institute for Health 
Studies, Medical College of Virginia and   Policy Research, under contract # 
500-83-0047. 
Sherrid, Pamela, Cutting the cost of staying healthy,   U.S.   and World Report, 
January 18, 1993, pp. 80-81. 
Sullivan, Louis W., Secretary, Department of Health and Human Resources, fmal report 
 Experience in the Medicare HMO and CMP Risk Program: 1985 to 
1988, 1990, based on   Policy Research study under contract # 
Thomas, J. William, and Roy Penchansky,  Relating Satisfaction With Access to 
Utilization of Services, Medical Care, June 1984, 
Tumlinson, Anne, et. al, Choosing A Health Plan: What Information Will Consumers 
Use? Health   May/June 1997, 
United States General Accounting Office, 
-- Managed Care: Explicit Gag Clauses Not Found in HMO Contracts, But Physician 
Concern Remains,  175, August 1997. 
-- Medicare: Issues Raised by Florida Health Maintenance Organization 
Demonstrations,  Chapter 5, GAO/HRD-86-97, July 1986. 
-- Medicare: Experience Shows Ways to Improve Oversight of Health Maintenance 
Organizations,  HRD-88-73, August 17, 1988, GAO report summary. 
-- Medicare: Physician Incentive Payments by Prepaid Health Plans Could Lower 
Quality of Care, GAO/HRD-89-29, December 1988. 
-- Medicare: PRO Review Does Not Assure Quality of Care Provided by Risk 
GAO/HRD-91-48, March 1991. 
40
 Medicare: HCFA Needs to Take Stronger Actions Against   Violating Federal 
Standards,  11, November 199 
Medicare: Increased HMO Oversight Could Improve Quality and Access to Care, 
GAO/HEHS-95-155, August 1995. 
Medicare: Federal Efforts to Enhance Patient Quality of Care,   GAO/HEHS-96-20, 
April 1996. 
Medicare: HCFA Should Release Data to Aid Consumers, Prompt Better HMO 
Performance,   GAO/HEHS-97-23, October 1996. 
Medicare: Fewer and Lower Cost Beneficiaries With Chronic Conditions Enroll in 
 GAO/HEHS-97-160, August 1997. 
Medicare   Rapid Enrollment Growth Concentrated in Selected States, 
 January 1996. 
Medicare   Potential Effects of a Limited Enrollment Period Policy, 
GAO/HEHS-97-50, February 1997. 
United States Senate, Special Committee on Aging, Minority Staff Report, Medicare and 
 A First Look, with Disturbing Findings, April 7, 1987. 
Ware, John E., Jr. and Ann H. Karmos, Volume II - Perceived Health and Patient Role 
Propensity, Development and Validation of Scales to Measure Patient Satisfaction with 
Health Care Services, prepared for National Center for Health Services Research, Public 
Health Service, 1976. National Technical Information Service, Publication No. 
331. 
Ware, John E., Jr., W. Russell Wright, and Mary K. Snyder, Volume IV - Key Health 
Concepts; Methodological Appendix,  Development and Validation of Scales to Measure 
Patient Satisfaction with Health   Services, prepared for National Center for Health 
Services Research, Public Health Service, 1976. National Technical Information Service, 
Publication No. PB-288-333. 
Ware, John E. Jr., Martha s. Bayliss, William H. Rogers, Mark Kosinski, and Alvin R. 
Tarlov, Differences in 4-Year Health Outcomes for Elderly and Poor, Chronically Ill 
Patients Treated in HMO and Fee-for-Service Systems,   Journal of the American 
Medical Association, November 12, 1996, 276: 13: 1039-1047. 
41
 APPENDIX  A

METHODOLOGY 
Definition of access 
Beyond referencing medical necessity and an actual or likely adverse effect on the 
beneficiary, the law and regulations do not clearly delineate what full access to services 
through an HMO means,  In order to construct a survey instrument that adequately 
covered access to services, we adapted a definition from   Basically, it uses 
five dimensions (availability, accessibility, accommodation, affordability, and 
acceptability) that represent the degree of fit between the patient and the health care 
system, e.g. existing services and the patients medical needs, or price of services and the 
patients ability to pay. To tailor the survey for Medicare risk   we expanded the 
idea of service availability to include the role of gatekeepers, primary physicians or others 
associated with the HMO, in preventing or facilitating beneficiaries receipt of covered 
services. Operationally, we divided access into five areas: appointments, including 
waiting time and administrative processes for making them; restrictions on medical 
services; incidence and reasons for out-of-plan care; behavior of primary HMO doctors 
and other HMO personnel towards beneficiaries; and beneficiary awareness of appeal and 
grievance rights. 
Sample selection 
From   Group Health Plan (GHP) data base, we selected a two-stage random 
sample, stratified at the second stage. 
At the first stage, we selected Medicare risk   from those under contract with 
HCFA as of June 1996.  From a total of 208 risk   we excluded 76 because they: 
1) had not been enrolling Medicare   for at least 6 months as of June 1996, 2) 
did not have at least 100 enrollees who had been members for 3 months or longer as of 
June 1996, or 3) did not have at least 60 disenrollees from March 1996 through June 1996 
who had been members for 3 months or longer.  We set these restrictions to avoid 
collecting data on   and beneficiaries with little Medicare HMO experience and to 
assure an adequate sampling universe per HMO. From the remaining 132   we 
randomly selected 40. 
At the second stage, we selected Medicare beneficiaries from each sampled HMO. The 
universe of beneficiaries for each sampled HMO contained two strata -- Medicare 
beneficiaries (enrollees) who were enrolled as of June 1996 and Medicare beneficiaries 
(disenrollees) who had disenrolled from March 1996 through June 1996 for reasons other 
than death.  From each sampled HMO, after excluding enrollees and disenrollees who had 
not been members for at least 3 months, we randomly selected 51 enrollees and 51 
disenrollees.  While we could have selected a proportional sample of beneficiaries, we 
chose not to because of a planned but separate analysis of the same data at the HMO 
level.  Instead, for this report, we weighted the beneficiary data as described below. 
A -l  Finally, using   Enrollment Data Base, we dropped beneficiaries who had died or 
who appeared as current enrollees, but had actually disenrolled since the last update to the 
GHP file. This process resulted in 2,038 enrollees and 2,027 disenrollees for a total of 
4,065  beneficiaries. 
Scope and data collection 
Since this studys primary focus is the Medicare beneficiaries perceptions of their risk 
HMO experiences, we only collected information from them. We surveyed both enrollees 
and disenrollees to compare their responses, and thus, to gain greater insight into HMO 
issues.  We did not contact   or their staffs, nor did we attempt to assess the quality 
or propriety of medical care rendered by the   to these beneficiaries.  We initially 
mailed structured survey forms to 4,065 beneficiaries in early August 1996. In 
September 1996, we mailed a follow-up letter and second survey form to non-respondents; 
we closed data collection in October 1996. 
With the exception of four questions on overall ratings of their HMO experiences, we did 
not directly and specifically ask beneficiaries about their satisfaction with the 
Instead we asked for more concrete details on beneficiaries perceptions and experiences, 
such as, how long were waits for appointments, or how often, if ever, did a primary 
physician fail to take health complaints seriously. Both enrollees and disenrollees 
provided information on sample and demographic data, enrollment experience, past health 
status and functional level, cost of HMO membership, HMO environment, and available 
HMO services. Additionally, enrollees were asked about current health status and future 
plans for HMO membership while disenrollees were asked about health status at 
disenrollment and reasons for disenrollment. 
A total of 3,229 survey forms were returned. Of these, 3,003 were   yielding an 
unweighted return rate of 74 percent overall, 82 percent for enrollees (N= 1,665) and 66 
percent for disenrollees (N = 1,338). 
Weighting and interpretation 
We weighted the collected data to reflect a non-response bias, differences in enrollment 
size among the sampled   and distribution of enrollees and disenrollees in the 
universe.  To determine non-response bias, we tested unweighted data for differences of 
means and proportions to discern significant differences between respondents and 
respondents by four demographic characteristics -- age, race, sex and number of months 
enrolled in the sampled HMO.  Since significant differences did exist, we conservatively 
weighted the sample to approximate the response rate per stratum per sampled HMO. 
The weighted data also approximates the relative Medicare enrollment sixes of the 
sampled   and the disproportionate distribution of enrollees and disenrollees in the 
universe (97% vs. 3%) for the sampling   For 1996, disenrollees from the 
sampled   were about 13 percent of enrolled HMO members. We calculated this by 
taking the mean of the 1996 disenrolhnents for the sampled 
A -2
 The results are generalizable to the 132   described in the sampling section, but not 
to those that didnt meet our sampling parameters.  However, the beneficiary universe 
from which we sampled our enrollees and disenrollees was 96 percent and 99 percent, 
respectively, of enrollees and disenrollees who were members of all 208   for 3 
months or  Further, our universe of enrollees and disenrollees was 87 percent 
and 85 percent of all Medicare risk enrollees and disenrollees. 
Because of the imbalance between enrollees and disenrollees, we primarily analyzed the 
two groups separately.  Comparisons between enrollees and disenrollees, or 
populations of them form the basis for all tables in this report, particularly when these 
groups differed markedly in reporting their HMO experiences.  All tables show the 
weighted percentages with the weighted number of respondents in parentheses. 
Additionally, we computed 95% confidence intervals and statistical significance for key 
questions (see Appendix B). A few of the confidence intervals are quite broad, 
particularly for disenrollees, due to the small number of responses for some questions. 
Comparability  of 1993 and 1996 data 
A core set of questions on enrollment experience and access to services appears in both 
the 1993 and 1996 survey forms.  Throughout the report, we present this comparative data 
for key questions.  One caveat is that for our 1993 study of beneficiary perspectives of 
Medicare risk   we selected the sample somewhat differently. At the first stage, 
selection of   we divided the universe into three strata based on disenrollment rates 
because we intended to study the usefulness of disenrollment rates as performance 
indicators. Our focus with the 1996 data does not include that line of inquiry. Also in 
1993, we did not place any sampling limits on the length of an HMOs participation in the 
Medicare risk program or on its enrollment size. At the second stage, selection of 
beneficiaries, the processes were similar in 1993 and 1996 except that in 1993 we did not 
exclude beneficiaries who had less than three months experience with the sampled HMO. 
However, a comparison of 1993 key questions, tabulated with and without responses from 
beneficiaries enrolled less than three months, usually showed a small difference of 1 
percentage point or less. 
Despite the differences in sample selection, the   and beneficiaries sampled in 1993 
and 1996 appear to have similar characteristics in the same proportions (see Appendix C). 
The   are predominantly   models and for-profit. Enrollees and disenrollees are 
predominantly female, white, age 65 or older, and high school graduates or higher. The 
average length of enrollment in the sampled   calculated from HCFA data, is 
shorter in 1996. This is not surprising, however, given the rapid growth in the Medicare 
risk HMO program between 1993 and 1996. One difference is that a higher percentage of 
enrollees in 1996 report prior experience with HMO care before enrolling in the sampled 
HMO. 
This inspection was conducted in accordance with the Quality Standards for Inspections 
issued by the Presidents Council on Integrity and Efficiency. 
A-3
 APPENDIX A -
1.	 Penchansky, Roy, DBA, and J. William Thomas,   The Concept of Access: 
Definition and Relationship to Consumer Satisfaction,   Medical Care, February 
1981,   127-140. 
Thomas, J. William,   and Roy Penchansky, DBA, Relating Satisfaction With 
Access to Utilization of Services,   Medical Care, June 1984, 
2.  The Penchansky and Thomas five dimensions of access to services are: 
a.	 Availability - the relationship of the volume and type of existing services 
(and resources) to the clients volume and types of need.  It refers to the 
adequacy of supply of medical providers, facilities and specialized programs 
and services, such as mental health and emergency care. 
b.	 Accessibility - the relationship between the location of supply and the 
location of clients, taking account of client transportation resources and 
travel time, distance and cost. 
C.	 Accommodation - the relationship between the manner in which the supply 
resources are organized to accept clients (including appointment systems, 
hours of operation, walk-in facilities, telephone services) and the clients 
ability to accommodate to these factors and the clients perception of their 
appropriateness. 
d.	 - The relationship of prices of services and the providers 
insurance (or deposit requirements) to clients income, ability to pay and 
existing health insurance.  Client perception of worth relative to total cost is 
a concern, as is client knowledge of prices, total cost and possible credit 
arrangements. 
e.	 Acceptability - the relationship of clients attitudes about personal and 
practice characteristics of providers to the actual characteristics of existing 
providers, as well as to provider attitudes about acceptable personal 
characteristics of clients. In turn, providers have attitudes about the 
preferred attributes of clients or their   mechanisms.  Providers 
may be unwilling to serve certain types of clients or, through 
accommodation, make themselves more or less available. 
3.	 Actually, the sample is a mix of   and competitive medical plans (CMP). 
Since the rules governing their   in the Medicare risk program are the 
same, we use HMO to refer to both. 
4.	 Of the 3,229 returned survey forms, 226 were not usable: 58 were returned for 
bad addresses, with no known forwarding address; 129 were not usable because the 
beneficiary was deceased or was unwilling/unable to complete the survey form; 39 
were not usable because the beneficiarys responses indicated (s)he may not be 
A-4
 referring to the sampled HMO, or few to none of the key questions were 
answered. 
5.	 The range of response rates for unweighted data per HMO was 59 percent to 92 
percent for enrollees and 43 percent to 84 percent for disenrollees. 
6.  Formulas used to weight data: 
Enrollees 
Enrollee universe per 
HMO universe (N = 132)  sampled HMO 
X 
HMO sample (N = 40)  Sampled enrollees per HMO 
Disenrollees 
Disenrollee universe per 
HMO universe (N = 132)  sampled HMO 
X 
HMO sample (N =  Sampled disenrollees per HMO 
7. 
Comparison of Beneficiary Universe Size 
-
All members 
(208 
130,436 
8.	 For those tables that do not show the proportion of all beneficiaries answering a 
question, that proportion is usually the same as or one point   that of the 
proportions shown for enrollees. 
9.	 Respondents did not answer every survey question. Many respondents were not 
eligible to answer every item because the survey form used screening questions. 
Thus, the weighted value of the beneficiaries eligible to answer varied by question. 
Some beneficiaries simply did not answer questions for which they were eligible. 
To accommodate these two factors, we calculated a response rate for each question 
based on the weighted value of eligible respondents.  Questions with response rates 
of less than 50% are not reported.  The majority of questions had response rates of 
80 % to 99 % .  In addition, percentages throughout the report are based only on the 
weighted responses to each question, not on the weighted value of all survey 
respondents. 
A -5
 APPENDIX  B

Point Estimates, Confidence Intervals and Statistical Significance 
for Key Survey Questions 
B -l  Table B-l : Point Estimates, Confidence Intervals, and Statistical Significance for Key Questions 
KEY:   = statistical significance tested   = difference is significant at   level  ns = not significant at   level 
Enrollees  Disenrollees 
Point Estimate  Standard Error  95% Confidence  Point Estimate  Standard Error  95% Confidence 
Proportion  of  beneficiaries:  Interval  Interval 
Believed  care given by PCP was good to  90.78  1.22  88.4 - 93.2  71.97  2.75  66.6 - 77.4 
excellent. 
Believed  HMO was good to excellent in  91.49  1 .oo  89.5 - 93.5  69.06  3.08  63.0 - 75.1 
orovidina needed services. 
Believed  HMO rules made getting needed  66.92  1.86  63.3 - 70.6  51.80  3.45  45.0 - 58.6 
services easy or very easy. 
Believed  HMO was definitely worth the cost  57.11  2.14  52.9 - 61.3  44.99  3.73  37.6 - 52.2 
of Medicare and/or HMO premiums. 
Health  at  enrollment  was: 
good to excellent  74.92  1.32  72.3 - 77.5  71.30  2.16  67.1 - 75.6 
fair  20.83  1.19  18.5 - 23.2  23.85  2.18  19.6 - 28.1 
poor to very poor  4.25  0.65  3.0 - 5.5  4.81  3.0 - 6.6 
Health at time of survey was: 
good to excellent  69.17  1.45  66.3 - 72.0  63.12  2.06  59.1 - 67.2 
fair  25.50  1.47  22.6 - 28.4  26.28  1.46  23.4 - 29.1 
poor to very poor  5.33  0.70  4.0 - 6.7  **  10.60  1.61  7.4 - 13.8 
 Reported medical care through HMO caused 
health to: 
improve  43.28  1.75  39.9 - 46.7  29.56  2.05  25.5 - 33.6 
worsen  2.57  0.57  1. 5 - 3. 7  **  11.31  1.7 3  7.9 - 14.7 
Asked at application about health problems.  17.74  1.91  14.0 - 21.5  19.90  4.05  12.0 - 27.8 
Didnt know they could change their minds  8.96  1.46  6.1  - 11.8  14.97  2.10  10.9 - 19.1 
about enrolling after they applied. 
Didnt know  must give referrals to  13.68  1.36  ll.O-  16.3  13.96  2.28  9.5 - 18.4 
specialists. 
B -2
 Table B-l : Point Estimates, Confidence Intervals, and Statistical Significance for Key Questions 
KEY:   = statistical significance tested   = difference is significant at   level  ns = not significant at   level 
Enrollees  Disenrollees 
Point Estimate  Standard Error  95% Confidence  Point Estimate  Standard Error  95% Confidence 
Proportion of beneficiaries:  Interval  Interval 
Didnt know they must use HMO  4.84  0.86  3.2 - 6.5  5.71  1.16  3.4 - 8.0 
doctors/hospitals  (except  emergency  and 
urgent care outside service area). 
Didnt know they had the right to appeal  26.67  1.78  23.2 - 30.2  35.26  2.02  31.3 - 39.2 
 refusals to provide/pay    services. 
Didnt know they had the right to formally  27.84  2.09  23.7 - 31.9  39.87  2.08  35.8 - 44.0 
 about other  II 
Didnt know about both appeal and  23.72  1.87  20.1 - 27.4  33.88  1.93  30.1 - 37.7 
grievance  rights. 
Were aware of complaint rights but had not  71.86  1.96  68.0 - 75.7  58.52  1.97  54.7 - 62.4 
filed. 
 Did not file because they had no problems 
with HMO.  96.11  0.74  94.7 - 97.6  81.13  4.04  73.2 - 89.0 
 Were aware of complaint rights and had  2.92  0.56  1.8 - 4.0  **  7.19  1.97 
filed. 
Of these, didnt feel complaint  was handled  35.87  10.97  14.4 - 57.4  41.59  13.7  14.7 - 68.4 
fairly. 
Were not aware of rights, but would have  54.92  4.30  46.5 - 63.3  54.98  5.10  45.0 - 65.0 
filed if aware.  II 
Waited  for  scheduled  appointments 
 1 to 8 days  79.36  1.97  75.5 - 83.2  78.05  1.79  74.5 - 81.6 
 13 to   days  13.14  1.89  9.4 - 16.8  13.38  1.63  10.2 - 16.6 
Of those who had been very sick, didnt get  4.07  0.91  2.3 - 5.9  **  14.81  2.39  10.1 - 19.5 
~  an appointment within a day or two. 
B-3
 Table B-l: Point Estimates, Confidence Intervals, and Statistical Significance for Key Questions 
KEY:   = statistical significance tested   = difference is significant at   level  ns = not significant at   level 
Enrollees  Disenrollees 
 Estimate  Standard Error  95% Confidence  Point Estimate  Standard Error  95% Confidence 
  of  beneficiaries:  Interval  Interval 
Of those needing to see a specialist, waited 
for  scheduled  appointments: 
1 to 8 days  69.55  2.80  64.1 - 75.0  64.05  2.74  58.7 - 69.4 
13 to  days   2.07  1.36  9.4 - 14.7  12.49  1.59  9.4 - 15.6 
 Waited for PCP in office and exam room: 
half hour or less  87.15  1.42  84.4 - 89.9  74.91  3.02  69.0 - 80.8 
longer than half hour  12.85  1.42  10.1 - 15.6  25.09  3.02  19.2 - 31 .o 
  Encountered  busy  appointment  telephones: 
all to most of time  9.74  1.34  7.1  - 12.4  **  15.65  1.69  12.3 - 19.0 
a few times to never  82.62  1.61  79.5 - 85.8  **  75.82  2.12  71.7 - 80.0 
Gave up trying to make appointments due to  5.57  1.27  3.1  - 8.1  **  12.12  1.51  9.2 - 15.1 
busy telephone lines. 
 PCP failed to provide needed 
covered  services: 
 yes  3.36  0.65  2.1  - 4.6  **  12.13  1.73  8.7 - 15.5 
  no  96.64  0.65  95.4 - 97.9  **  87.87  1.73  84.5 - 91.3 
Of those needing to see a specialist, PCP  95.01  0.76  93.5 - 96.5  85.82  2.27  81.4 - 90.3 
never failed to give referral. 
Of those who had health problems, PCP  89.63  0.90  87.4 - 91.4  77.05  2.19  72.8 - 81.3 
usually explained all treatment options. 
Were seen only b y a member of doctors  6.97  0.88  5.2 - 8.7  **  15.91  2.16  11.7 - 20.1 
staff  when  they  had  doctors  appointment. 
Of these, happened  2 to  times in last 6  41.90  7.07  28.0 - 55.8  53.48  8.55  36.7 - 70.2 
months. 
B -4
 Table B-l : Point Estimates, Confidence Intervals, and Statistical Significance for Key Questions 
KEY:   = statistical significance tested   = difference is significant at   level  ns = not significant at   level 
Enrollees  Disenrollees 
Point Estimate  Standard Error  95% Confidence  Point Estimate  Standard Error  95% Confidence 
Proportion  of  beneficiaries:  interval  interval 
 Women who were offered a: Pap test  58.21  3.27  51.8 - 64.6  50.10  2.47  45.3  - 55.0 
mammogram  70.59  2.78  65.1  - 76.0  59.63  2.72  54.3  - 65.0 
Beneficiaries who were offered none of 
preventive or screening services.  5.05  1.03  3.0 - 7.1  7.07  1.95  3.2 - 10.9 
 Of those needing non-routine services, had 
to wait for HMO pre-approval.  12.67  2.13  8.5 - 16.8  23.57  2.56  18.6 - 28.6 
 Of these, waited for HMO pre-approval 5 
times in last 6 months.  0.97  0.99  0.0 - 2.9  **  6.99  3.18  0.8 - 13.2 
 Of these, waited for pre-approval: 
 C l   54.93  7.46  40.3 - 69.6  41.63  6.47  28.9 - 54.3 
ns 
 3 weeks or longer  13.73  4.06  5.8 - 21.7  **  26.87  9.10  9.0 - 44.7 
 Had sought out-of-plan care.  5.82  0.91  4.0 - 7.6  **  10.26  1.63  7.1 - 13.5 
Of these, believed they: 
 needed the care even if HMO would  32.88  4.82  23.4 - 42.3  32.44  7.33  18.1 - 46.8 
not approve it. 
 wouldnt have to pay for it.  2.77  1.61  0.0 - 5. 9  * *  19.54   7.06  5.7 - 33.4 
 Of those using emergent or urgent care  10.25  2.24  5.9 - 14.6  20.13  4.12  12.1 - 28.2 
services, HMO refused to pay. 
 Of women answering re: HMO policy for 
requiring a referral to a gynecologist, said: 
 referral required  34.08  3.46  27.3 - 40.9  60.79  4.62  51.7 - 69.8 
 dont know  38.01  3.14  31.9 - 44.2  **  15.75  3.19  9.5 - 22.0 
 Of women   answering regarding HMO  64.33  3.91  56.7 - 72.0  80.41  5.76  69.1 - 91.7 
policy for a referral to a gynecologist, said 
they didnt need to see a gynecologist. 
B -5
 Table B-l : Point Estimates, Confidence Intervals, and Statistical Significance for Key Questions 
II 
** 
KEY:   = statistical significance tested  = difference is significant at   level  ns = not significant at   level 
Enrollees  Disenrollees 
Point Estimate  Standard Error  95% Confidence  Point Estimate  Standard Error  95% Confidence 
Proportion  of  beneficiaries:  interval  Interval
PCP at sometime had failed to take health  7.00  5.2 - 8.8  18.66  1.68  15.4 - 22.0 
complaints seriously. 
Of these, happened all to most of time  28.25  7.74  13.0 - 43.4  40.46  5.34  30.0 - 50.9  II 
 Believed most important to   was: 
giving best care possible  73.94  1.75  70.1  - 77.4  57.27  2.88  51.6 - 62.9 
holding down cost of care  7.08  0.85  5.4 - 8.7  **  14.96  2.39  10.3 - 19.6 
 Believed most important to   was: 
-
ghoivlidnign gb edsotw cna rceo spto sosf ibclaere  6115..6036   11..1332   5192..18  -- 6147..22   ****   4236..3510   32..9674   3251..53  - 31.7  II 
 Were encouraged to leave the HMO.  1.21  0.37  0.5 - 1.9  **  6.99  1.31  4.4 - 9.6  II 
Most important reason for joining the HMO  53.8  1.55  50.8 - 56.8  54.73  3.00  48.9 - 60.6 
was wanting more affordable health care. 
Would be less likely to join an HMO if  16.37  1.05  14.3 - 18.4  33.25  3.20  27.0 - 39.5 
required to remain a member for a year. 
Enrollees who had no plans to leave their  92.70  91 .o - 94.4 
Disenrollees who left their   for  30.79  6.26  18.5 - 43.1 
administrative  reasons. 
B -6
 Table B-2: Point Estimates, Confidence Intervals, and Statistical Significance 
for Key 1993-96 Questions 
 = statistical significance tested   = difference is significant at   level  ns = not significant at   level 
Enrollees  Disenrollees 
1993  1996  1993  1996 
Point Estimate and  Point Estimate and  Point Estimate and  Point Estimate and 
Proportion  of  beneficiaries:  95% Confid. interval  95% Confid. interval  95% Confid. interval  95% Confid. interval 
 Asked at application about health problems  42.9%  17.7%  **  48.3%  19.9%  ** 
(35.4  - 50.4)  (14.0 - 21.5)  (39.5 - 57.1)  (12.0 - 27.8) 
  Encountered  busy  appointment  telephones  all  18.8%  9.7%  **  34.2%  15.7%  ** 
to most of time  (13.2  - 24.4)  (7.1 - 12.4)  (24.3 - 44.0)   (12.3 - 19.0) 
 PCP at sometime didnt take health  11.6%  7.0%  **  38.8%  18.7%  ** 
complaints  seriously  (8.6 - 14.5)  (5.2 - 8.8)  (27.6 - 50.1)   5.4 - 22.0) 
 Reported medical care through HMO caused  N A  NA  21.9%  11.3%  ** 
health to worsen  (12.8 - 31.1)  (7.9 - 14.7) 
 Had sought out-of-plan care  N A  N A  22.1%  10.3%  ** 
(15.5 - 28.7)  (7.1 - 13.5) 
 PCP didnt fail to provide needed  N A  NA  78.1%  87.9%  ** 
covered  services.  (70.0 - 86.2)  (84.5  - 91.3) 
Believed holding down cost of care was most 
important  to: 
 primary care physician  9.6%  7.1%  27.6%  15.0% 
(5.9 - 13.3)   (5.4 - 8.7)  (17.6 - 37.5)  (10.3 - 19.6) 
 HM O  10.8%  15.0%  35.0%  26.5% 
(8.3 - 13.4)  (12.8 - 17.2)  (25.5 - 44.4)  (21.3  - 31.7) 
B-7
 APPENDIX  C

DEMOGRAPHIC COMPARISON OF 1993 AND 1996 DATA 
BY  BENEFICIARY 
Weighted Data 
Demographics  Enrollees 93  Enrollees 96  Disenrollees  Disenrollees 
93  96 
SEX 
Female  60%  (650,984)  56%  53%   5,065)  55 % (34,004) 
Male  40%  (433,067)  44%  (968,928)  47%  (13,139)  45%  (27,910) 
White  90%  (966,213)  83%   2,704)  88%  (24,872)  82%  (50,565) 
Non-White  7%  (80,352)  11%  (242,742)  12%  (3,332)  8%  (5,243) 
Unknown  3%  (37,486)  6%  (140,247)  0  10%  (6,106) 
AVERAGE AGE  74 Years  73 Years  73 Years  72 Years 
EDUCATION 
 Than High School  25%  (268,473)  20%  (432,333)  20%  (5,683)  19%  (11,564) 
High School Diploma  29%  (312,201)  30%  (648,906)  22%  (6,238)  24%  (15,226) 
> Than High School  42%  (460,539)  44%  (978,774)  49%   3,778)  45%  (27,790) 
No  Response  4%  (42,838)  6%  (135,679)  9%  (2,504)  12%  (7,335) 
MEDICARE 
CATEGORY 
Aged  97%  96%  92%  (25,907)  93%  (57,687) 
3%  (31,513)  4%  (97,229)  8%  (2,296)  7%  (4,227) 
HMO  EXPERIENCE 
Prior  Experience  14%  (148,072)  26%  (560,948)  21%  (5,997)  21%   2,996) 
No  Experience  82%  (887,056)  66%  71%  (19,905)  71%  (39,212) 
No  Response  4%  (48,923)  8%  (183,466)  8%  (2,302)  8% (4,853) 
AVERAGE  LENGTH 
OF TIME IN HMO  36 Months  34 Months  29 Months  21 Months 
BY HMO

YEAR  MODEL TYPES  TAX STATUS  STATES 
Group  Staff  Nonprofit  Number 
1993  30 (67%)  9 (20%)  6 (13%)  33 (73%)  12 (27%)  22 
1996  29 (73%)  8 (20%)  3  (8%)  28 (70%)  12 (30%)  19 
For the 1996 survey, no ESRD beneficiaries were selected in the disenrollee sample. 
C -l  APPENDIX  D

SUPPLEMENTARY  TABLES  FOR  BENEFICIARY  SURVEY  FINDINGS

Table D-l: Beneficiaries Health and Functional Status 
Enrollees  Disenroliees 
1993  1996  1993  1996 
While in the HMO, reported no serious  67%  61%  69%  64% 
health problems, e.g. broken bones or  (653,180) (1  (16,440)  (43,058) 
cancer. 
Enrollees 1996  Disenrollees 1996 
While in the HMO, reported no serious  46%    49%   
health  problems  which  include  diabetes,  (971,796)  (28,578) 
lung  problems,  and  other. 
Had no functional limitations (activities of  68%  71% 
daily  living).  (40,898) 
Had no serious health problems   no  41%    43%   
functional limitations.  (834,681)  (24,392) 
 For comparative purposes, excludes diabetes, lung problems, and other category of serious health 
problems  reported  by  beneficiaries. 
Table D-2: Beneficiary Self-Reported Changes in Health Status  1996 
Enrollees  Health  at  Enrollment  Disenroiiee   at Enrollment 
Excellent  Fair  Poor to  Excellent 
Health  to Good  Very Poor  to Good 
Total  (75%)  (4%)  Total  (73%) 
Excellent  86%  23%  7%  83% 
to Good  (69%)  (91,596)  (5.994)  (64%)  (26,745) 
12%  70%  36%  13%  70%  25% 
Fair  (181,654)  (27,672)  (13,418) 
Poor to  2%  8%  57%  4%  20%  66% 
Very  Poor  (5%)  (31,147)  (44,349)  (11%)  (1.896)  (1,460) 
 In 1996, 67% of enrollees and 60% of disenroliees had been enrolled in the sampled   for more than 
12. months. 
D -l  Table D-3: Appointment Times  II 
Were able to get a doctors appointment in  94%    96%    65%  85%   
a day or 2 when they were very sick.  (636,620)  114,579)  126,301) 
For a scheduled appointment with their 
primary HMO doctors, usually waited: 
1  to 4 days  52%  58%  52%  49%   
(484,306)  (990,519)  (11,876)  (24,800) 
5 to 8 days  26%  22%  23%  29% 
(245,809)  (375,635)  (14,819) 
.  6%  8%  7% 
(58,994)  (129,013)  (1,594)  (4,Z9, 
13 to more than 20 days  16%  13%  18%  13% 
(150,632)  (226,212)  (6,972) 
II 
Enrollees 1996  Disenrollees 1996  II 
For  a  scheduled  appointment  with 
specialists, usually waited: 
.  1 to 4 days  40%    32% 
 19,608)  (I  0,473) 
5 to 8 days  30%  33% 
(10,822) 
13%  17% 
  68,415) 
  13 to more than 20 days  18%  19% 
(23 1,604) 
Usually waited in the office and exam room 
before seeing their primary HMO doctors: 
less than   hour  87%    75% 
(I  (40,707) 
 hour to 1 hour  12%  21% 
(236,776)   1,604) 
.  more than 1 hour  1%  4% 
(23,847) 
D -2
 Table   Appointment Handled by Nurse or Technician - 1996 
All  Enrollees  Disenrollees 
Seen   by a nurse or technician when beneficiary had  7%  7%  16% 
an appointment with primary HMO doctor.  (150,091,  (141,467)  (8,624) 
In the last 6 months, for those who could remember, 
this  happened: 
1 time  58%  59%  47%   
(54,028)  (51,976,  (2,052) 
2 times  30%    30%    29% 
(19,954)  (18,670)  (1,284) 
3 times or more  12%  11%  24% 
(10,021) 
II 
Table D-5: Non-Routine Services - 1996 
All  Enrollees  Disenrollees 
Experienced  delays  in  non-routine  services  because  13%  13%  24% 
HMO had to approve them first.  (184,653)  (175,330)  (9,323) 
Non-routine  services  for  which  they  experienced  delays. 
referrals  to  specialists  63%  63%  69% 
(113,305)  (106,919)  (6,386) 
.  physical  therapy  24%  25%  10% 
(43,287)  (42,338) 
special tests, e.g., CAT scan, stress test  17%  17%  20% 
(31,012)  (29,182)   ,830) 
In the last 6 months, waited for HMO approval of 
routine  services: 
1 or 2 times  77%  77%  64% 
(118,448)  (113,150)  (5,298) 
3 or 4 times  21%  20%  26% 
(31,919)  (29,753,  (2.161) 
5 or more times  3%  2%  10% 
(4,235) 
In the last 6 months, usually waited for HMO approval: 
less than 1 day to 6 days  54%  55%  42%   
(83,384)   1)  (3,333) 
1 to 2 weeks  31%  31%    32% 
(48,204)  (45,681)  (2,523) 
.  3 weeks or longer  14%  14%  27% 
(22,157)  (2,151) 
D -3
 Table D-6: Routine Preventive and Screening Services Offered in the Last Year 
Compared to Healthy People 2000 Goals 
Healthy People 2000  Enrollees  Disenrollees 
Standard  Goal  Progress  All   mos.   12 mos.  All   mos.   mos. 
Pap test:  70%  53%  58%  53%  61%  50%  36%  59% 
women aged   uterine cervix;  1994  (634,286)  (184,504)  (449,781)  (14,689)  (10,533) 
received test w/in preceding 1 to 3 yrs. 
mammogram:  60%  45%  71%  64%  74%  60%  49%  66% 
women aged   who received breast  1994  (769,140)  (223,060)  (546,080)  (17,515)  (5,616)  (11,899) 
exam and test w/in preceding 2 years 
prostate cancer screen:  40%  38%  58%  60%  57%  59%  53%  62% 
men aged   received digital rectal  1992  (502,610)  (160,553)  (342,057)  (13,990)  (3,917) 
exam during the last year 
blood  pressure  reading:  N A  N A  83%  83%  84%  83%  78%  85% 
no standard that approximated our data  (512,760)  (43,781)  (14,704)  (29,077) 
blood  cholesterol  screen:  75%  54%  65%  61%  67%  65%  59%  68% 
adults   who had blood  1993 w/in  (380,930)  (894,370)  (34,346)  (11,146)  (23,200) 
lesterol checked w/in preceding 5 yrs  2 years 
colon cancer screen: 
 fecal occult blood test w/in  50%  31%  30%  31%  27%  20%  31% 
preceding 2 years  (608,881)  (188,429)  (420,452)  (14,312)  (3,669)  (10,643) 
  proctosigmoidoscopy  ever  received  40% 
flu  80%  N A  63%  52%  69%  61%  43%    70% 
older  people  (321,218)  (920,362)  (8.137)  (23,916) 
pneumonia  immunization:  80%  N A  36%  29%  39%  32%  29%  34% 
older  people  (697,195)  (181,448)  (515,747)   6,978)  (11,609) 
none of these services offered  N A  NA  5%  6%  5%  7%  9%  6% 
(98,974)  (37,193)  (61,781)  (1.646)  (2,061) 
Does not include beneficiaries who said they had not seen an HMO doctor or had not received any health care services through the HMO while they had been a 
member. 
Number of sampled Medicare women with uterine cervix is unknown.

36% in 1992, people aged   who had fecal blood test with a routine checkup in past 2 years

Since this is a seasonal service, the rate for > 12 months is probably a more accurate indicator within the beneficiary data.
 Table D-7: Seeking Out-of-Plan Care 
Enrollees  Disenrollees 
1993  1996  1993  1996 
Beneficiaries who went out-of-plan  7%  6%  22%  10% 
(65,629)  (113,168)  (5,187)  (5,144) 
Enrollees 1996  Disenrollees 1996 
Beneficiaries  went  out  of  plan  because: 
.  Needed care even if HMO would  32%  32% 
not  approve  (36,715)  (1,662) 
.  Temporarily out of  19%  25% 
service  area  (22,077)  (1,287) 
Couldnt get HMO services  15%  11% 
quickly  enough  (16,657) 
Didnt think they would have to  3%  20% 
(3,148)  ( 1 , 0 0 1 ,  
.  Primary HMO doctor wouldnt  9%  10% 
make referral to specialist 
Primary HMO doctor wasnt  8%  12% 
helping  beneficiary  (9,187)  
Table D-8: Other Components of Enrollment Decisions  1996 
All  Enrollees  Disenrollees 
Immediately before joining the HMO, source of health 
care was: 
.  another HMO  28%  28%  23% 
(573,944,  (560,948,  (12,996) 
.  non-HMO doctor  54%  54%  58% 
(1  (33,168) 
no regular source  15%  15%  16% 
(300,241)  (291,207) 
.  other  4%  4%  3% 
(81,651)  (79,788)  (1,863) 
Beneficiaries who pay no HMO premium.  43%    43%    39%   
(933,966,  (910,814)  (23,152) 
 those who do pay a premium, the monthly amount 
s: 
$1 to $19  29%  27% 
(296,430)  (288,107)  (8,323) 
 $39  30%  30%  45%   
(321,103)'  (306,954)  (14,149, 
.   $59  29%  29%  14% 
(298,032)  (293,810)  (4,222) 
$60 to $79  6%  6%  7% 
(87,226)  (85,167) 
.  $80 or more  4%  4%  8% 
(44,185)  (41,735) 
D -5
 Table D-9: Disenrollees Most Important Reasons for Leaving Their 
Percent  Beneficiaries 
ADMINISTRATIVE REASONS (total)  31%  11,262 
Moved or frequently out of service area  18%  6,439 
Membership  ended  involuntarily  (clerical  error,  HMO  no  longer  2%  819 
part of retirement benefit, unpaid premium) 
.  Changed plan within HMO, or other administrative change  11%  4,004 
HEALTH CARE DELIVERY SYSTEM (total)  42%    15,190 
Discomfort/dislike of HMO restrictions or way of doing business  3%  996 
.  HMO not what expected based on enrollment information (costs,  3%  1,030 
covered  services,  or  restrictions) 
Cost only or cost vs. service benefit (excluding Rx) too high;  8%  2,867 
another HMO was better deal 
Doctors/hospitals  not conveniently located  3%  1,110 
Doctors or hospitals no longer with HMO; may have followed  8%  2,735 
doctor to new HMO 
.  Not enough choice of or disliked doctors/hospitals; preferred  9%  3,219 
provider not with HMO 
Joined another HMO; no specific reason given  2%  831 
.  Other coverage (e.g. Medicaid, VA) or setting (e.g. nursing  4%  1,292 
home) 
Combination  of  reasons/other  reasons  3%   10 
 TO MEDICAL SERVICES (total)  18%  6,779 
.  Appointment  difficulties  1%  392 
.  Billing disputes or HMO slow to pay providers  1%  376 
.  Referral problems (denied or difficult access to services)  2%  846 
.  Not  personally  well-treated  by  PCP/HMO  personnel  (rudeness,  2%  869 
complaints  ignored,  doctor  rushed  or  disinterested) 
  Poor quality medical care (wrong diagnosis/treatment, treatment  5%  1,778 
delayed/denied/limited, getting sicker/not getting better, hospital 
discharge too soon, seen by personnel other than doctor). 
.  Quality or access compromised by emphasis on cost  1%  274 
.  Combination of or other access problems  6%  2,244 
RESCRIPTION  DRUGS  needed  too  expensive,  not  covered;  drug  4%  1,301 
 may have changed since enrollment 
 desire for better care or combination of reasons among  6%  2,055  Table D-IO: Enrollees Plans for Future Health Care 
1993 
Had no plans to leave their present  84%    93%   
(771,929, 
Planned to leave because of a move.  2% 
(22,317)  (16:;4) 
Planned to leave for reasons other than moving.  4%  3% 
 1)  (50,780) 
Couldnt leave, but wanted to.  10%  4% 
(93,774)  (74,479) 
 Does not total 100% due to rounding. 
D -7
 APPENDIX  E

SUPPLEMENTARY AND STATISTICAL TABLES FOR

FUNCTIONALLY LIMITED, DISABLED, AND CHRONICALLY ILL BENEFICIARIES

Table E-l: Beneficiary Perspectives and Functional Limits - 1996 
Enrollees  Disenrollees 
Service  Access  Through  Physician   Limit  No Limits   Limit  No Limits 
Received  appointment  with  physician  92%    97%  87%    84%   
w/in l-2 days when verv sick.  (233,233)  (768,985)  (7,320)  (17,717) 
Primary  physician  explained  treatment  85%  91%  68%  79% 
options.  (280,598)  (6,742)  (25,390, 
Physician failed to give needed  8%  20%  11% 
Medicare-covered services.  (26,111)  (35Z7) (2,047)  (4,136) 
Physician failed to admit beneficiary to  3%  1%  8%  4% 
hospital  when  needed.  (6.110)  (8,241)  (522)  (660) 
Physician failed to refer beneficiary to a  6%  5%  25%  12% 
specialist  when  needed.  (11,235)  (58,280)  (2,072)  (3,313) 
Enrollees  Disenrollees 
Physician  Attitudes/HMO  Administration   1 Limits  No Limits   1 Limits  No Limits 
Physician did not take health  16%  5%  24%  17% 
complaints  seriously.  (58,381  (2,418)  (6,444) 
Cost most important to primary  9%  8%  27%  18% 
physician  (25,475)   14,317)  (1,795) 
Experienced delays in receiving  16%  11%  30%    22%   
 services in past 6 months.  (41,497,  (123,089)  (2,589)  (6,495) 
fase of obtaining care was: 
 easy or very easy 
55%  70%  40%    55% 
 neither easy nor hard  (184,029)  (4,388)  (21,128) 
35%  26%  29%  28% 
 hard or very hard    16,287)  (408,357)  (3,198)   0,837) 
11%  5%  31%    16% 
(35,229)  (70,889)  (3,468)  (6,225) 
E -l  Table E-2: Beneficiary Perspectives and Medicare Status - 1996 
Enrollees  Disenrollees 
Service  Access  Through  Physician  Aged  Disabled  Aged  Disabled 
Received  appointment  with  physician  96%  95%  85%  87%   
 l-2 days when   sick.  (982,645,  (63,365)  (23,952, 
Primary  physician  explained  treatment  89%    92%  78%    61%   
options.    (73,799 )   1,090)  (2,176) 
Physician failed to give needed  3%  4%  11%  27% 
Medicare-covered services.  (62,609,  (3,233)  (5,265) 
Physician failed to admit beneficiary to  1%  4%  4 %  19% 
hospital  when  needed.  (12,747) 
Physician failed to refer beneficiary to a  4%  16%  13%  36%   
specialist  when  needed.  (64,581)   2,935)  (4,586) 
Enrollees  Disenrollees 
Physician  Attitudes/HMO  Administration  Aged  Disabled  Aged  Disabled 
Physician did not take health  7%  13%  17%  39% 
complaints  seriously.  (127,608)  (11,106)  (7,943)  (1,441) 
Cost most important to primary  9%  5%  20%  24% 
physician.  (138,033)  (4,030)  (7,135) 
Experienced delays in receiving  12%  23%  23%  34% 
routine services in past 6 months.  (159,867)  (15,463)  (8,222)  (1,101) 
Ease of obtaining care was: 
 easy or very easy  68%  45%  52%  45%   
  (40,033 )  (24,640)   ,640) 
 neither easy nor hard  27%  31%  29%  18% 
(517,876)  (26,971)  (13,834) 
 hard or very hard  5%  24%  18%  37% 
(85,526)  (21,226)  (8,616)  (1.364) 
E -2
 Table E-3: Beneficiary Perspectives and Chronic Illness -1996 
Enrollees  Disenrollees 
Service  Access  Through  Physician  Chron. Ill  Not Ill  Chron. Ill  Not Ill 
Received  appointment  with  physician  96%    97%  86%  86%   
w/in l-2 days when verv sick.  (391,906)  (617,497 ,  (9,342)  (16,033) 
Primary  physician  explained  treatment  89%  90%  76%  77% 
options.  (500,790)  (916,539 ,  (10,132)  (22,086) 
Physician failed to give needed  5%  3%  9%  14% 
Medicare-covered services.  (30,957)  (33,800)   ,237)  (4,804) 
Physician failed to admit beneficiary to  2%  2%  8%  3% 
hospital when needed. 
Physician failed to refer beneficiary to a  6%  5%  17%  13% 
specialist  when  needed.  (28,345)  (48,883)  (2,043)  (3,237) 
Enrollees  Disenrollees 
Physician  Attitudes/HMO  Administration  Chron. Ill  Not Ill  Chron. Ill  Not Ill 
Physician did not take health  8%  7%  17%  19% 
complaints  seriously.  (48,558)  (89,932)  (2,282) 
Cost most important to primary  8%  8%  18%  20%   
physician.  (38,964)  (93,132)  (1,874)  (5,359) 
Experienced delays in receiving  12%  13%  32%    20% 
routine services in past 6 months.  (56,667)  (111,513)  (3,718)  (5,207) 
Ease of obtaining care was: 
 easy or very easy  70%  65%  57%  50% 
(403,291)  (861,301 )  (17,760) 
 neither easy nor hard  23%  30%  24%  30%   
(131,778)  (395,847 ,  (3,314)  (10,462) 
 hard or very hard  7%  5%  19%  20%   
(37,884)  (64,139,  (7,017) 
E -3
 Table  E-4:  Point  Estimates,  Confidence  Intervals,  and  Statistical  Significance  by  Functional  Status 
KEY:   = statistical significance tested   = difference is significant at   level  ns = not significant at   level 
1 + Functional Limits  No  Functional  Limits 
Point Estimate  Standard Error  95% Confidence  Point Estimate  Standard Error  95% Confidence 
Proportion of beneficiaries:  Interval  Interval 
Received appointment with physician w/in 
2 days when very sick. 
enrollees  91.55  3.59  84.5 - 98.6  97.42  0.73  96.0 - 98.9 
disenrollees  88.64  3.25  82.3 - 95.0  ns  83.65  2.71  78.3 - 89.0 
Primary  physician  explained  treatment 
options. 
enrollees  84.99  2.64  79.8 - 90.2  **  91.23  0.90  89.5 - 93.0 
disenrollees  68.47  5.21  58.3 - 78.7  79.10  2.87  73.5 - 84.7 
Physician failed to give needed 
covered services. 
enrollees disenrollees  19.84 7.88  4.13 2.93  11.7 2.1 -- 13.6 28.0  ** **  10.65 2.30  0.46 1.70  7.3 1.4 -- 14.0 3.2  II 
Physician failed to admit beneficiary to 
hospital when needed. 
enrollees  2.89  1.55  0.0 - 6.0  ns  1.19 
disenrollees  8.18  3.08  2.1  - 14.2  ns  3.9 9 
Physician failed to refer beneficiary to a 
specialist  when  needed. 
enrollees  6.38  2.28  1.9 - 10.8 
disenrollees  25.16  5.31  14.8 - 35.6 
E-4
 Table  E-4:  Point  Estimates,  Confidence  Intervals,  and  Statistical  Significance  by  Functional  Status 
KEY:   = statistical significance tested   = difference is significant at   level  ns = not significant at   level 
1 + Functional Limits  No Functional Limits 
Point Estimate  Standard Error  95% Confidence  Point Estimate  Standard Error  95% Confidence 
Proportion of beneficiaries:  Interval  Interval 
Physician did not take health complaints 
seriously. 
enrollees  16.39  3.29  9.9 - 22.8  **  4.64  0.68  3.3 - 6.0 
disenrollees  23.90  3.69  16.7 - 31.1  **  16.62  2.19  12.3 - 20.9 
Cost most important to primary physician. 
enrollees  9.37  2.70  4.1  - 14.7  8.35  0.98  6.4 - 10.3 
disenrollees  26.59  5.29  16.2 - 37.0  18.63  3.01  12.7 - 24.5 
Experienced delays in receiving non-routine 
services in past 6 months. 
enrollees  16.17  3.75  8.8 - 23.5  11.37  2.35  6.8 - 16.0 
disenrollees  29.76  6.86  16.3 - 43.2  22.07  2.42  17.3 - 26.8 
Ease of obtaining care was easy or very easy 
enrollees  54.84  3.30  48.4 - 61.3  **  69.51  2.09  65.4 - 73.6 
disenrollees  39.70  5.50  28.9 - 50.5  55.32  3.67  48.1  - 62.5 
Ease of obtaining care was neither easy nor 
hard 
enrollees  34.66  3.23  28.3 - 41 .O  25.98  1.90  22.3 - 29.7 
disenrollees  28.93  3.83  21.4 - 36.4  28.38  2.50  23.5 - 33.3 
Ease of obtaining care was hard or very hard 
enrollees  10.50  2.63  5.3 - 15.7  **  4.51  0.78  3.0 - 6.0 
disenrollees  31.38  2.42  20.2 - 42.6  16.30  2.42  11.6 - 21.0 
E-5
 Table E-5: Point Estimates, Confidence Intervals, and Statistical Significance by Medicare Status 
KEY:   = statistical significance tested   = difference is significant at   level  ns = not significant at   level 
Age 65 or Older  Disabled 
Point Estimate  Standard Error  95% Confidence  Point Estimate  Standard Error  95% Confidence 
Proportion  of  beneficiaries:  Interval  Interval 
Received appointment with physician w/in 
2 days when very sick. 
enrollees  96.01  0.93  94.2 - 97.8  94.56  3.33  88.0 - 100.0 
disenrollees  85.00  2.41  80.3 - 89.7  87.09  6.40  74.5 - 99.6 
Primary  physician  explained  treatment 
options. 
enrollees  89.47  0.91  87.7 - 91.3  92.03  3.09  86 0 - 98.1 
disenrollees  78.48  2.55  73.5 - 83.5  **  61.03  8.83  43.7 - 78.3 
Physician failed to give needed 
covered  services. 
enrollees  3.36  0.68  2.0 - 4.7  3.67  2.02  0.0 - 7.6 
disenrollees  11 .oo  1.61  7.8 - 14.2  **  27.54  8.91  10.1  - 45.0 
Physician failed to admit beneficiary to hospital 
when  needed. 
enrollees  1.44  0.48  0.5 - 2.4  4.01  2.69  0.0 - 9.3 
disenrollees  3.82  1.40  1.1  - 6.6  **  19.23  8.87  1.8 - 36.6 
Physician failed to refer beneficiary to a 
specialist  when  needed. 
enrollees  4.40  0.68  3.1 - 5.7  **  16.26  6.10  4.3 - 28.2 
disenrollees  12.65  2.04  8.7 - 16.6  **  36.15  8.27  19.9 - 52.4 
E-6
 Table E-5: Point Estimates, Confidence Intervals, and Statistical Significance by Medicare Status 
KEY:   = statistical significance tested   = difference is significant at   level  ns = not significant at   level 
Age 65 or Older  Disabled 
Point Estimate  Standard Error  95% Confidence  Point Estimate  Standard Error  95% Confidence 
Proportion  of  beneficiaries:  Interval  Interval 
Physician did not take health complaints 
seriously. 
 enrollees  6.75  0.93  4.9 - 8.6  12.83  5.38  2.3 - 23.4 
 disenrollees  17.05  1.86  13.4 - 20.7  **  39.27  8.24  23.1 - 55.4 
Cost most important to primary physician. 
 enrollees  8.54  1.05  6.5 - 10.6  5.42  3.20  0.0 - 11. 7 
 disenrollees  19.77  3.13  13.6 - 25.9  23.68  9.27  5.5 - 41.8 
Experienced delays in receiving non-routine 
services in past 6 months. 
 enrollees  12.17  2.04  8.2 - 16.2  23.49  10.15  3.6 - 43.4 
 disenrollees  22.65  2.29  18.2 - 27.1  33.94  11.68  11 .O -56.8 
Ease of obtaining care was easy or very 
easy. 
68.02  1.84  64.4 - 71.6  45.37  7.80  30.1 - 60.7 
 enrollees  52.33  3.59  45.3 - 59.4  44.77  8.16  28.8 - 60.8 
 disenrollees 
Ease of obtaining care was neither easy nor 
hard 
 enrollees  27.45  1.68  24.2 - 30.7  30.57  7.22  16.4 - 44.7 
 disenrollees  29.38  2.04  25.4  - 33.4  17.99  6.74  4.8 - 31.2 
Ease of obtaining care was hard or very hard 
 enrollees  4.53  0.74  3.1 - 6.0  **  24.06  6.15  12.0 - 36.1 
 disenrollees  18.30  3.00  12.4 - 24.2  37.24  8.91  19.8 - 54.7 
E-7
 Table E-6: Point Estimates, Confidence Intervals, and Statistical Significance by Health Status 
KEY:   = statistical significance tested   = difference is significant at   level  ns = not significant at   level 
Chronically  Ill  Not  Chronically  Ill 
Point Estimate  Standard Error  95% Confidence  Point Estimate  Standard Error  95% Confidence 
Proportion  of  beneficiaries:  Interval  Interval 
Received  appointment  with  physician  within 
l-2 days when   sick. 
ednisreonllreoelsle es  9856..5360   23..2302   9719..28  -- 19020.8.0   8956..5536   02..9978   7994..76  -- 9981..54  II 
Primary  physician  explained  treatment 
options. 
II 
enrollees  88.90  2.13  84.7 - 93.1  90.39  1.51  87.4 - 93.3 
disenrollees  75.76  3.33  69.2 - 82.3  77.47  2.68  72.2 - 82.7 
Physician failed to give needed 
covered  services. 
enrollees  5.38  1.76  1.9 - 8.8  **  2.60  0.63  1.4 - 3.8 
disenrollees  8.77  3.13  2.6 - 14.9  13.63  2.50  8.7 - 18.53 
Physician failed to admit beneficiary to 
hospital  when  needed. 
enrollees  1.60  0.78  0.1  - 3.1  1.51  0.59  0.4 - 2.7 
disenrollees  7.80  2.76  2.4 - 13.2  3.43  1.78  0.0 - 6.9 
Physician failed to refer beneficiary to a 
specialist  when  needed. 
enrollees disenrollees  17.42 5.57  4.11 2.01  9.4 1.6 --25.5 9.5  12.76 5.00  0.99 2.75  7.4 3.1 -- 18.2 6.9  II

E-8
 Table E-6: Point Estimates, Confidence Intervals, and Statistical Significance by Health  Status 
KEY:   = statistical significance tested   = difference is significant at   level  ns = not significant at   level 
Chronically  Not  Chronically 
Point Estimate  Standard Error  95% Confidence  Point Estimate  Standard Error  95% Confidence 
  of  beneficiaries:  Interval  Interval 
Physician did not take health complaints 
seriously. 
enrollees  8.38  2.68  3.1  - 13.6  6.80  1.02  4.8 - 8.8 
disenrollees  17.36  2.73  12.0 - 22.7  18.87  2.26  14.4 - 23.3 
Cost most important to primary physician. 
enrollees  7.79  1.78  4.3 - 11.3  8.26  1.10  6.1  - 10.4 
disenrollees  18.48  5.23  8.2 - 28.7  19.8 3  3.45  13.1  - 26.6 
Experienced delays in receiving non-routine 
services in past 6 months. 
enrollees  12.07  2.41  7.3 - 16.8  12.93   2.56  7.9 - 17.9 
disenrollees  32.17  5.14  22.1 - 42.4  19.69  2.82  14.2 - 25.2 
Ease of obtaining care was easy or very easy 
enrollees  70.39  2.46  65.6 - 75.2  ns  65.1 9  2.2 9  60.7 - 69.7 
disenrollees  56.66  7.97  41.0  =  72.3  50.40  2.86  44.8 - 56.0 
Ease of obtaining care was neither easy nor 
hard 
enrollees  23.00  2.25  18.6 - 27.4  29.96  2.89  24.3 - 35.6 
disenrollees  24.29  4.13  16.2 - 32.4  29.69  2.13  25.5 - 33.9 
Ease of obtaining care was hard or very hard 
  enrollees  6.61  1.42  3.8 - 9.4  4.85  0.91  3.1  - 6.6 
disenrollees  19.05  5.23  8.8 - 29.3  19.91  2.73  14.6 - 25.3 
E-9
 APPENDIX  F

TEXT OF AGENCY COMMENTS

F -l  DEPARTMENT OF HEALTH   HUMAN SERVICES

Health Care Financing Administration 
Washington D.C.  0001 
DATE: 
MAR 
TO:	 June Gibbs Brown 
Inspector General 
FROM:	 Nancy-Arm 
Administrator 
SUBJECT:  Office of Inspector General (OIG) Draft Report: Beneficiary Perspectives 
of Medicare Risk Health Maintenance Organizations 
9500430)  -
We have reviewed the above referenced draft report which describes beneficiaries 
experiences with their Medicare risk   in 1996. 
Medicare beneficiaries may join a risk HMO through the Medicare program.  In return for 
a predetermined monthly amount per enrollee, the   must provide all 
covered services that are medically necessary, except hospice care. Once enrolled, 
beneficiaries are usually required to use HMO physicians and hospitals. As of October 
1997, the Health Care Financing Administration (HCFA) reported 307 risk HMO plans 
serviced   Medicare enrollees. 
Using HCFA databases, OIG selected a two-stage random sample of 4,065 enrollees and 
disenrollees from 40 Medicare risk  Since the reports primary focus was 
Medicare beneficiaries experiences in their risk   OIG collected information 
directly from them.  As in the study conducted in 1993, OIG surveyed both enrollees and 
disenrollees to compare their responses, and to gain greater insight into HMO issues. 
HCFA concurred with all OIG recommendations. Our detailed comments are as follows: 
 Recommendation 1 
 should be more closely monitored to assure that they properly inform beneficiaries 
about their appeal and grievance rights. 
HCFA Response 
We concur.  HCFA is striving to improve beneficiary outreach and education, especially 
for beneficiaries in   to make them aware of their appeal and grievance rights. 
HCFA will also be working with the Information Counseling and Assistance 
grantees and beneficiary advocacy groups to promote further education to beneficiaries in 
this area.  We would add, however, that HCFAs existing monitoring protocol and the review of 
member and marketing materials that takes place by HCFA Regional Office staff, already 
incorporates distinct functional components that evaluate plans on their ability to 
communicate clearly Medicare beneficiaries appeal and grievance rights. In addition, 
Medicare beneficiaries are advised of their appeal rights each time a service claim is 
denied or service authorization is denied, limited or reduced.  HCFA reviews member and 
marketing materials on an ongoing basis. Claims and service denials are audited for 
compliance at least every two years, and on an as-needed basis. 
OIG Recommendation 2 
Beneficiaries should be better informed about HMO procedures for obtaining services. 
HCFA Response 
We concur. The newly developed Medicare managed care database (Medicare Compare) 
will assist in improving beneficiaries understanding of procedures and restrictions within 
managed care plans.  The May version of the database will include information about 
choice of doctors and whether referrals to specialists are needed.  For example, data for 
each plan will display one of the following scenarios with respect to physician access: 
limitations to the plans network of physicians, limitations to group practice physicians, 
no restrictions to physicians and/or whether the plan offers an out of network option.  If 
an enrollee is limited to physicians within the group practice, the database will indicate if 
referrals to specialists are needed. 
In addition to Medicare Compare, HCFA and its regional offices now can use the 
Medicare Managed Care Marketing Guidelines to assist them in oversight activities that 
relate to this issue.  For instance, the Marketing Guidelines provide health plans with a 
model evidence of coverage document that contains standardized   including 
terms such as exclusion, covered service, services not covered and prior authorization. 
We believe that use of the Marketing Guidelines will assist HCFA staff in its compliance 
efforts, and will help ensure that Medicare beneficiaries receive consistent information. 
OIG Recommendation 3 
Service access problems encountered by functionally limited, disabled, and chronically ill 
beneficiaries should be identified and carefully monitored, as they are especially 
vulnerable. 
HCFA Response 
We concur. Admittedlv, HCFAs ability to monitor access for all Medicare beneficiaries 
enrolled in managed care plans has been limited. We believe, however, that HCFAs 
Quality Improvement System for Managed Care (QISMC) will strengthen our ability to 
 and enforce geographically-relevant access-to-care standards. Historically, 
HCFAs and States reviews of managed care plans have focused on structural standards  that have looked at a plans infrastructure and capacity to   adequate 
or to improve care, as opposed to looking at whether the plan actually provided adequate 
access to care across all of its populations, including functionally limited, disabled, and 
chronically ill populations.  In addition to   and elaborating on what 
expectations are with regard to health plans internal quality assessment and 
improvement, QISMC contains a separate domain and substandard that is intended to 
ensure that the health plans service planning takes into account the needs of its entire 
membership and the organization works to reduce barriers to access. QISMC standards 
will apply to both Medicare   plans and health plans contracting with State 
Medicaid agencies for the Medicaid population. These standards will serve as the basis 
for HCFA reviewers to monitor plans performance and compliance based on data.  For 
purchasers, including HCFA and state Medicaid agencies, QISMC will elaborate on the 
tools available and develop a strategy for purchasers to use to improve the care of their 
beneficiaries.  Purchasers have a responsibility to use available data and work with plans 
to improve the quality of care they deliver.  Such tools include standards, publishing data, 
technical assistance and collaborative quality improvement projects, and incentives. 
In addition to QISMC, the Health of Seniors component of   will help HCFA 
assess whether Medicare beneficiaries believe they receive adequate access to health care 
services. This survey will reach 1,000 Medicare beneficiaries in all contracting health 
plans, including presumably, beneficiaries who are functionally limited, disabled or 
chronically ill. 
OIG Recommendation 4 
Medicare risk   should be monitored for inappropriate screening of beneficiaries 
health status at application 
HCFA Response 
We concur.  We agree that the issue identified in the report warrants carefully regulatory 
attention from HCFA.  We would add, however that HCFA, through its Regional Offices, 
already monitors health plan adherence to prohibitions against pre-enrollment health 
screening. This is accomplished as follows: 
(1) HCFA staff review all pre-enrollment member, marketing and enrollment materials to 
be certain that contracting health plans do not attempt to screen individuals by asking 
questions relating to health status.  Health plans may ask if the beneficiary is in a hospice, 
has end stage renal disease, is eligible for Medicaid, or whether the beneficiary is in an 
institution, such as a nursing home, sanatorium or long term care hospital. Health plans 
 utilize materials not otherwise approved in advance by the HCFA regional office 
staff.  (2) HCFA requires that all contracting health plans incorporate the requirements 
mentioned earlier into the organizations training and employee education programs. 
HCFA staff review companies printed policies and procedures to be certain that 
applicable requirements germane to health screening are fully incorporated into the 
documents.  HCFA staff routinely review these materials during monitoring reviews. 
(3) HCFA staff interview health plans marketing directors and marketing staff to assess 
their level of understanding of health screening requirements and prohibitions. 
OIG Recommendation 5 
HCFA should systematically collect and track over time HMO-specific 
reported data on access to medical services through their   and reasons for 
disenrolhnent. 
HCFA Response 
We concur.  The report mentions that HCFA is planning to release HEDIS measures to 
the public. This is correct. We should point out that HEDIS contains 3 measures looking 
at access to services--adults access to preventive/ambulatory health services, availability 
of primary care providers, and availability of behavioral health care providers.  These 
data would support the recommendation that   data collections should go beyond 
relying on general ratings or satisfaction scales. 
In addition, we have already added reasons for disenrollment to the form that the Social 
Security Administration uses when beneficiaries disenroll at district offices.  The 
Medicare   Hotline will use this form when it begins to accept disenrollments 
some time next year.  We collect this information via the Enrollment Broker 
Demonstration. 
OIG Recommendation 6 
HCFA should distinguish between administrative and non-administrative disenrollments. 
HCFA Response 
We concur.  HCFA is aware of the critical need to distinguish between administrative 
reasons for disenrollment and for cause reasons for   HCFA is currently 
developing a more thorough listing of reasons for disenrolhnent from which beneficiaries 
can choose when asked why they are disenrolling. 
OIG Recommendation 7 
HCFA should take steps to better inform older women about gynecological services and 
health.  HCFA Response 
We concur.  The May version of Medicare Compare also has built in specifications about 
the annual gynecological exam benefit. For example, if enrollees are limited to 
physicians within the group practice, the database will provide further information about 
whether referrals are needed and it specifically makes reference when the annual 
gynecological exam does not require a referral from the primary care physician. 
This information will be available on the Internet as well as print materials, e.g., 1998 
Medicare Handbook.  The data in Medicare Compare will be used to print out 
information by area to all 39 million beneficiaries.  In essence, beneficiaries that live in 
the Washington, D.C. area will receive a hardcopy of plans that are offered in their local 
area and comparison information with respect to benefits and services provided by those 
plans including the information above.  This effort is part of HCFAs overall public 
education campaign that will take place over the next year. 
The beneficiary education plan for expanded Medicare prevention benefits in 1998 
consists of two components: 
Phase I, the awareness campaign is a broad dissemination targeting the 
entire Medicare population. A one-page message focusing on informing 
the beneficiary about the availability of new prevention benefits, namely 
annual mammogram, pap smears and pelvic examinations, diabetes 
monitoring and self-management education, colorectal cancer screening, 
and bone mass measurement, was distributed to HCFA partners and 
contractors.   addition, the message contained information regarding 
other ongoing covered services   pneumonia). 
Phase II, the health promotion campaign, will begin later in 1998. This 
phase is designed to encourage appropriate use of the prevention services 
by beneficiaries.  In phase II, HCFA will join with the Center for Disease 
Control, Division of Cancer Prevention and Control, to develop a 
beneficiary health promotion campaign focusing on colorectal cancer 
screening.  Depending upon the results of the market research, the health 
promotion campaign may also include pap smear and cervical cancer 
screening, and mammography. In addition, we are recommending 
expanding HCFAs National Mammography 2000 campaign to include 
pap smear and cervical cancer screening information. This would be 
accomplished using materials created by the National Cancer Institutes of 
the National Institute of Health and capitalizing on the information and 
dissemination strategies of the National Mammography 2000 effort. 
Strategies for promoting the use of diabetes monitoring and self-
management education and bone mass measurement will be developed 
once regulations have been completed.