OFFICE OF 

INSPECTOR GENERAL 

BENEFICIARY PERSPECTIVES OF 

MEDICARE RISK 

199 6 

4 JUNE GIBBS BROWN 

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 don’t 

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 didn’t know what was required (38%); of the remaining women, 

64 percent didn’t feel they needed gynecological services. Women’s 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 didn’t 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:

Didn’t get quick appointments when they were very ill (15% vs. 4%)

HMO doctors didn’t 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 report’s recommendations. 

111 
TABLEOFCONTENTS

EXECUTIVE SUMMARY

INTRODUCTION

FINDINGS

Summary of Beneficiaries’ Assessments

Health and Functional Status

Federal HMO Requirements

Access: Appointments for Services

Access: Medical Services and Out-of-Plan Care

Access: Behavioral Barriers to Services

Functionally Limited, Disabled and Chronically Ill HMO Beneficiaries

Reasons for Joining and Leaving an HMO

RECOMMENDATIONS

AGENCY COMMENTS

BIBLIOGRAPHY

APPENDICES

Methodology 

Statistical Data for Key Questions 

Demographic Comparison of 1993 and 1996 Data 

Supplementary Tables for Beneficiary Survey Findings 

Supplementary and Statistical Tables for Functionally Limited, Disabled 

and Chronically Ill Beneficiaries 

1 

5 

5 

6 

8 

11 

13 

17 

20 

22 

27 

30 

31 

36 

A-l 

B-l 

C-l 

D-l 

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 beneficiary’s 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 HCFA’s 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 HCFA’s 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 study’s 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 President’s 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 

Care given by 

primary doctor 

HMO on 

viding needed 

Enrollees Disenrollees 

Excell. Good Fair Poor/VP Excell. Good Fair 

46 % 43 % 7% 2% 36% 36% 18% 10% 

(956,663) (864.2681 (144,799 ) (30,588) (18,766) (18,634) (9,157) 

46 % 46 % 7% 1% 29% 40 % 18% 14% 

(924,442) (920,958) (149,799 ) (21.8351 (14,834) (20,840) 

services 

HMO rules make 

getting needed 

care --

V.Easy Easy Neither HardNH V.Easy Easy Neither HardNH 

26% 41% 28% 5 % 22% 30% 29% 20% 

(516,590) (806,715) (547,420) (106,754) (14,956) (14.4921 (9,980) 

HMO worth 

premium costs? 

Definite Probable Not Definite Probable Not 

Yes Yes Decided No Yes Yes Decided No 

57% 30% 9% 4% 45% 28% 10% 17% 

(589,533) (169,840) (71,92 8 (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 

Medical care received through the HMO 

caused their health to: 

Enrollees Disenrollees 

1993 1996 1993 1996 

 improve 

 stay the same 

 worsen 

53% 43 % 34% 36 % 

(498,298) (847,873) (7,239) (14,247) 

45% 54% 43 % 59% 

(423,270) (9,335) (28,500) 

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 beneficiary’s 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 

Were asked at application about health 

problems, excluding kidney failure and 

hospice care. 

Were required to have a physical 

examination before joining HMO. 

Didn’t know they could change their minds 

about enrolling after they applied. 

Didn’t know, from the beginning, they: 

Disenrollees 

1993 1996 

48 % 20% 

1% 

1%) 

15% 15% 

(3,446) (6,273) 

Enrollees 

1993 1996 

43 % 18% 

(313,060) (237,335 ) 

3% 1% 

(25,827) (15,165) 

8% 9% 

(75,186) (112,609) 

 needed a referral from their primary 

HMO doctors to see a specialist. 

 could only use HMO doctors and 

hospitals (except emergent care and 

urgent care outside the service area). 

17% 14% 10% 14% 

(8,082) (110,631) (283,724 ) 

6% 6% 4% 

(1,665) (3,427) (38,972) (1045.0;6591 

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 didn’t know they could have changed minds 

about enrolling after they applied. Also within this group, 14 percent of both disenrollees 

and enrollees didn’t 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 

1993 1996 

Disenrollees 

199 3 199 6 

Didn’t know they had right to file formal 

complaint about HMO’s refusal to provide 

or pay for services (appeal). 

25% 27% 31% 35% 

(243,871) (527,146) (6,753) (18,778) 

Enrollees 1996 Disenrollees 1996 

Didn’t know they had right to file formal 

complaint about other HMO problems, e.g., 

quality of care, waits for appointments 

(grievance). 

28% 40 % 

(544,016) (20,864) 

Knew about appeal or grievance rights, but 

-

not about both.

Didn’t know about appeal grievance 

rights. 

7% 7% 

(125,276) 

24% 34 % 

(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 didn’t 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 didn’t 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 didn’t 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 don’t know about their right to file formal complaints, and that this trend has 

not improved from 1993 to 1996. 

 beneficiaries don’t 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 

Were aware of rights, but had filed a formal 

complaint about the HMO. 

Of these, didn’t file a complaint because: 

All Enrollees Disenrollees 

72% 72% 59% 

(30,610) 

 no problems with HMO 

 left the HMO instead 

Were aware of rights and had filed a formal complaint 

about the HMO: 

Of these, HMO did not handle formal complaint fairly. 

Weren’t aware of right to file formal complaints. 

Of these, would have filed if had been aware. 

96% 96% 81% 

(17,769) 

1% 1% 13% 

(8.833) (5,917) 

3% 3% 7% 

(62,204) (58,442) (3,762) 

36% 36% 42 % 

 9,302) 8,022) ,280) 

25% 25% 34% 

(521,776) (503,844) (17,932) 

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 

didn’t formally complain because said didn’t 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 didn’t 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 

didn’t 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 

1993 1996 

Disenrollees 

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 

to hospital when needed. 

98% 95% 

(22,474) 

Primary HMO doctor never failed to refer to 

 when needed. 

95% 86% 

(33,310) 

Primary HMO doctor usually explained all 

wavs health could be treated. 

90% 77% 

(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 didn’t 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 didn’t 

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 doctor’s staff (see Table D-4). Sixteen percent of disenrollees who had a doctor’s 

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 beneficiaryreported 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 didn’t 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 women’s 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 didn’t 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 

 referral required 

 don‘t know 

Women for whom a referral for gynecological services 

was not pertinent: 

 primary doctor is a gynecologist 

 uses primary doctor for all health care 

 didn’t need to see a gynecologist 

28% 28% 23% 

(185,050) (181,843) 

35% 35% 61% 

(230,439) (222,131) (8,308) 

38% 38% 16% 

(249,897) (247,745) (2.152) 

39% 38% 49 % 

(420,165) (407,202) (12,963) 

3% 3% 3% 

(10,684) (10,239) 

33% 33% 16% 

(137,087) (134,993) 

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 didn’t need to see a 

gynecologist. Interestingly, disenrolled women (80%) were much more likely than 

enrolled women (64%) to believe that. These women’s 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 didn’t 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: Doctor’s Behavior Regarding Health Complaints 

Enrollees Disenrollees 

1993 1996 1993 1996 

Primary HMO doctor did not take health 12% 7% 39% 19% 

complaints (108,855) (13,874) (8,868) (9,383) 

Didn’t 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 didn’t take 

complaints seriously, 

 seemed not to listen 

 blamed health problems on beneficiary’s 

 seemed impatient 

 wouldn’t let beneficiary fully explain 

concerns 

 didn’t examine beneficiary 

45% 50% 

 1,449) (4,327) 

36% 47 % 

(41,788) (4,104) 

25% 36% 

(28,388) (3,104) 

26% 33% 

(29,832) (2,856) 

23% 31% 

(26,885) 

seriously. 
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 

Most important to your primary HMO 

doctor is: 

Enrollees Disenrollees 

1993 1996 1993 1996 

 holding down cost of care 

 giving best medical care possible 

 don’t know 

Most important to your HMO is:* 

10% 7% 28% 15% 

(94,695) (142,064) (6,460) (7,655) 

73% 74% 47% 57% 

(7 16,623) 0,927) (29,309) 

12% 16% 24% 25% 

(120,819) (312,089) (5,564) (12,876) 

 holding down cost of care 

 giving best medical care possible 

 don’t know 

11% 15% 35% 27% 

(108,364) (300,595) (13,689) 

67% 62% 39 % 43 % 

(667,057) (9.016) (22,369) 

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 doctor’s care of them, functionally limited enrollees were more likely than 

healthier enrollees to say their doctors didn’t 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 doesn’t 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 doesn’t 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 

 less likely to join 

 no effect on decision 

34% 34% 22% 

(749,412) (12,801) 

17% 16% 33% 

(37 1,062) (351,497) (19,565) 

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 couldn’t 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 couldn’t, 

largely for reasons of affordability, i.e., health care outside the HMO was too expensive 

or non-HMO doctors don’t 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 couldn’t 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 

ADMINISTRATIVE REASONS (total) 

HEALTH CARE DELIVERY SYSTEM (total) 

 Provider problems: doctors/hospitals not conveniently located, no 

longer with HMO, not enough choice of or disliked doctors/hospitals; 

preferred provider not with HMO 

Percent Beneficiaries 

31% 11,262 

42 % 15,190 

20% 7,064 

 Cost only or cost vs. service benefit (excluding Rx) too high; another 

HMO was better deal 

8% 2,867 

 Discomfort/dislike of HMO way of doing business; HMO not what 

expected based on enrollment information 

6% 2,026 

 Combination of reasons/other reasons, e.g., other coverage (VA, 

Medicaid) 

ACCESS TO MEDICAL SERVICES (total) 

 Poor quality medical care: wrong diagnosis/treatment, treatment 

delayed/denied/limited, getting sicker/not getting better, hospital 

discharge too soon, seen by personnel other than doctor. 

9% 3,233 

18% 6,779 

5% 1,778 

 Difficulties with appointments, referrals; quality or access 

compromised by emphasis on cost 

4% 1,512 

 Not personally well-treated by PCP/HMO personnel (rudeness, 

complaints ignored, doctor rushed or disinterested) 

2% 869 

 Combination of or other access problems, e.g., billing disputes or 

HMO slow to pay providers 

PRESCRIPTION DRUGS needed too expensive, not covered; drug 

coverage may have changed since enrollment 

7% 2,620 

4% 1,301 

General desire for better care or combination of reasons among 

categories 

6% 2,055 

Administrative reasons for as we defined them, are business or 

procedural actions to end a beneficiary’s 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 didn’t 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 Medicare’s 

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 

physician’s 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 didn’t 

know they needed referrals from their primary HMO doctors to see a specialist, and 5 

percent weren’t 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 women’s 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 didn’t 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 

don’t know because they haven’t tried to make appointments for gynecological 

services. In fact, another 25 percent of the women said they didn’t 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
AGENCYCOMMENTS

Health Care Financing Administration 

We received comments from the Health Care Financing Administration (HCFA) on this 

report. HCFA concurred with all of the report’s 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 HMO’s 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, Alzheimer’s 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 spouse’s 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. Don’t 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? Don’t 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 HMO’s 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. 

. 

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 enrollee’s 

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 don’t need to see a gynecologist because getting a referral is difficult or 

because of a mistaken belief that they don’t 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. 

Comparison of Beneficiaries Who Received Services 

by Length of Enrollment 

Stratum 12 months > 12 months 

Enrollees 88.17 

(83.3 - 92.5) 

95.46 

(89.0 - loo) 

90.85 

(84.9 - 96.8) 

96.59 

89.7 - loo) 

33
25. 

26. 

27. 

28. 

29. 

30. 

31. 

32. 

33. 

34. 

35. 

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. 

 Paul, Michael Paula Lozana and Julia “Chronic Care 

Costs in Managed Care, Health May/June 1997, pp. 239-247. 

 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, 

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. 

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. 

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. 

Disabled disenrollees and enrollees comprise only 24 percent and 12 percent, 

respectively, of the functionally limited populations. 

Lamphere, Jo Ann, Patricia Neuman, Kathryn Langwell, and Daniel Sherman, 

“The Surge in Medicare Managed Care: An Update, Health May/June 

1997, 127-133. 

Lamphere, et al., May/June, 1997. 

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. 

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. “Medicare’s Oversight of Managed Care: Monitoring Plan Performance,” 

96-00190 

“Medicare’s 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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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 patient’s medical needs, or price of services and the 

patient’s 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 study’s 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 didn’t 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 HMO’s 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 President’s 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 client’s 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 client’s 

ability to accommodate to these factors and the client’s perception of their 

appropriateness. 

d. - The relationship of prices of services and the providers’ 

insurance (or deposit requirements) to client’s 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 beneficiary’s 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 

Proportion of beneficiaries: 

Point Estimate 

Enrollees 

Standard Error 95% Confidence 

Interval 

Point Estimate 

Disenrollees 

Standard Error 95% Confidence 

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 

worsen 

43.28 1.75 39.9 - 46.7 29.56 2.05 25.5 - 33.6 

2.57 0.57 1. 5 - 3. 7 ** 11.31 1.7 3 7.9 - 14.7 

Asked at application about health problems. 

Didn’t know they could change their minds 

about enrolling after they applied. 

17.74 1.91 14.0 - 21.5 19.90 4.05 12.0 - 27.8 

8.96 1.46 6.1 - 11.8 14.97 2.10 10.9 - 19.1 

Didn’t 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 

Proportion of beneficiaries: 

Didn’t know they must use HMO 

doctors/hospitals (except emergency and 

urgent care outside service area). 

Point Estimate 

4.84 

Enrollees 

Standard Error 

0.86 

95% Confidence 

Interval 

3.2 - 6.5 

Point Estimate 

5.71 

Disenrollees 

Standard Error 95% Confidence 

Interval 

1.16 3.4 - 8.0 

Didn’t 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. 

Didn’t 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 

Didn’t 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 

filed. 

2.92 0.56 1.8 - 4.0 ** 7.19 1.97 

Of these, didn’t 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, didn’t 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 

 of beneficiaries: 

 Estimate 

Enrollees 

Standard Error 95% Confidence 

Interval 

Point Estimate 

Disenrollees 

Standard Error 95% Confidence 

Interval 

Of those needing to see a specialist, waited 

for scheduled appointments: 

1 to 8 days 

13 to days 

 Waited for PCP in office and exam room: 

half hour or less 

longer than half hour 

69.55 2.80 64.1 - 75.0 64.05 2.74 58.7 - 69.4 

 2.07 1.36 9.4 - 14.7 12.49 1.59 9.4 - 15.6 

87.15 1.42 84.4 - 89.9 74.91 3.02 69.0 - 80.8 

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 

a few times to never 

9.74 1.34 7.1 - 12.4 ** 15.65 1.69 12.3 - 19.0 

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 

 no 

3.36 0.65 2.1 - 4.6 ** 12.13 1.73 8.7 - 15.5 

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 doctor’s 6.97 0.88 5.2 - 8.7 ** 15.91 2.16 11.7 - 20.1 

staff when they had doctor’s 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: 

 Cl 54.93 7.46 40.3 - 69.6 41.63 6.47 28.9 - 54.3 

 3 weeks or longer 13.73 4.06 ns 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. 

 wouldn’t have to pay for it. 2.77 1.61 0.0 - 5. 9 * * 19.5 4 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 

 don’t 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 didn’t 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 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 

holding down cost of care 

73.94 1.75 70.1 - 77.4 57.27 2.88 51.6 - 62.9 

7.08 0.85 5.4 - 8.7 ** 14.96 2.39 10.3 - 19.6 

 Believed most important to was: 

giving best care possible holding down cost of care 61.66 1.32 59.1 - 64.2 ** 43.31 3.97 35.5 

-

15.03 1.13 12.8 - 17.2 ** 26.50 2.64 21.3 - 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 

was wanting more affordable health care. 

53.8 1.55 50.8 - 56.8 54.73 3.00 48.9 - 60.6 

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 

administrative reasons. 

30.79 6.26 18.5 - 43.1 

beneficiaries: 

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 

Proportion of beneficiaries: 

Enrollees 

1993 1996 

Point Estimate and Point Estimate and 

95% Confid. interval 95% Confid. interval 

Disenrollees 

1993 1996 

Point Estimate and Point Estimate and 

95% Confid. interval 95% Confid. interval 

 Asked at application about health problems 42.9% 17.7% ** 

(35.4 - 50.4) (14.0 - 21.5) 

48.3% 19.9% ** 

(39.5 - 57.1) (12.0 - 27.8) 

 Encountered busy appointment telephones all 

to most of time 

18.8% 9.7% ** 

(13.2 - 24.4) (7.1 - 12.4) 

34.2% 15.7% ** 

(24.3 - 44.0 ) (12.3 - 19.0) 

 PCP at sometime didn’t take health 

complaints seriously 

11.6% 7.0% ** 

(8.6 - 14.5) (5.2 - 8.8) 

38.8% 18.7% ** 

(27.6 - 50.1) 5.4 - 22.0) 

 Reported medical care through HMO caused 

health to worsen 

N A NA 21.9% 11.3% ** 

(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 didn’t fail to provide needed 

covered services. 

N A NA 78.1% 87.9% ** 

(70.0 - 86.2) (84.5 - 91.3) 

Believed holding down cost of care was most 

important to: 

 primary care physician 

 HM O 

9.6% 7.1% 27.6% 15.0% 

(5.9 - 13.3 ) (5.4 - 8.7) (17.6 - 37.5) (10.3 - 19.6) 

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 

SEX 

Female 

Male 

White 

Non-White 

Unknown 

AVERAGE AGE 

EDUCATION 

 Than High School 

High School Diploma 

> Than High School 

No Response 

MEDICARE 

CATEGORY 

Aged 

HMO 

Prior Experience 

No Experience 

No Response 

AVERAGE LENGTH 

OF TIME IN HMO 

Enrollees ‘93 Enrollees ‘96 Disenrollees Disenrollees 

‘93 ‘96 

60% (650,984) 56% 53% 5,065) 55 % (34,004) 

40% (433,067) 44% (968,928) 47% (13,139) 45% (27,910) 

90% (966,213) 83% 2,704) 88% (24,872) 82% (50,565) 

7% (80,352) 11% (242,742) 12% (3,332) 8% (5,243) 

3% (37,486) 6% (140,247) 0 10% (6,106) 

74 Years 73 Years 73 Years 72 Years 

25% (268,473) 20% (432,333) 20% (5,683) 19% (11,564) 

29% (312,201) 30% (648,906) 22% (6,238) 24% (15,226) 

42% (460,539) 44% (978,774) 49% 3,778) 45% (27,790) 

4% (42,838) 6% (135,679) 9% (2,504) 12% (7,335) 

97% 96% 92% (25,907) 93% (57,687) 

3% (31,513) 4% (97,229) 8% (2,296) 7% (4,227) 

14% (148,072) 26% (560,948) 21% (5,997) 21% 2,996) 

82% (887,056) 66% 71% (19,905) 71% (39,212) 

4% (48,923) 8% (183,466) 8% (2,302) 8% (4,853) 

36 Months 34 Months 29 Months 21 Months 

EXPERIENCE 

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 

health problems, e.g. broken bones or 

cancer. 

67% 61% 69% 64% 

(653,180) (1 (16,440) (43,058) 

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 

Health 

Total 

Excellent 

to Good (69%) 

Fair 

Poor to 

Very Poor (5%) 

Enrollees’ Health at Enrollment 

Excellent 

to Good 

(75%) 

86% 

12% 

(181,654) 

2% 

Fair 

23% 

(91,596) 

70% 

8% 

(31,147) 

Poor to 

Very Poor 

(4%) 

7% 

(5.994) 

36% 

(27,672) 

57% 

(44,349) 

Total 

(64%) 

(11%) 

Disenroiiee at Enrollment 

Excellent 

to Good 

(73%) 

83% 

(26,745) 

13% 

4% 

70% 25% 

(13,418) 

20% 66% 

(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 doctor’s 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% 

(484,306) 

5 to 8 days 26% 

(245,809) 

. 6% 

(58,994) 

13 to more than 20 days 16% 

(150,632) 

58% 

(990,519) 

22% 

(375,635) 

8% 

(129,013) 

13% 

(226,212) 

52% 

(11,876) 

23% 

7% 

(1,594) 

18% 

49 % 

(24,800) 

29% 

(14,819) 

(4,Z9, 

13% 

(6,972) 

II Enrollees 1996 Disenrollees 1996 II 

For a scheduled appointment with 

specialists, usually waited: 

. 1 to 4 days 40 % 

 19,608) 

5 to 8 days 30% 

13% 

 68,415) 

� 13 to more than 20 days 18% 

(23 1,604) 

32% 

(I 0,473) 

33% 

(10,822) 

17% 

19% 

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’ 

Standard 

Pap test: 

women aged uterine cervix;’ 

received test w/in preceding 1 to 3 yrs. 

Healthy People 2000 

Goal Progress 

70% 53% 

1994 

All 

58% 

(634,286) 

Enrollees Disenrollees 

 mos. 12 mos. All mos. mos. 

53% 61% 50% 36% 59% 

(184,504) (449,781) (14,689) (10,533) 

mammogram: 

women aged who received breast 

exam and test w/in preceding 2 years 

60% 45% 71% 64% 74% 60% 49% 66% 

1994 (769,140) (223,060) (546,080) (17,515) (5,616) (11,899) 

prostate cancer screen: 

men aged received digital rectal 

exam during the last year 

40% 38% 58% 60% 57% 59% 53% 62% 

1992 (502,610) (160,553) (342,057) (13,990) (3,917) 

blood pressure reading: 

no standard that approximated our data 

blood cholesterol screen: 

adults who had blood 

lesterol checked w/in preceding 5 yrs 

colon cancer screen: 

 fecal occult blood test w/in 

preceding 2 years 

 proctosigmoidoscopy ever received 

flu 

older people 

pneumonia 

older people 

none of these services offered 

N A 

75% 

50% 

40% 

80% 

80% 

N A 

N A 

54% 

1993 w/in 

2 years 

N A 

N A 

NA 

83% 83% 84% 83% 78% 85% 

(512,760) (43,781) (14,704) (29,077) 

65% 61% 67% 65% 59% 68% 

(380,930) (894,370) (34,346) (11,146) (23,200) 

31% 30% 31% 27% 20% 31% 

(608,881) (188,429) (420,452) (14,312) (3,669) (10,643) 

63% 52% 69% 61% 43 % 70% 

(321,218) (920,362) (8.137) (23,916) 

36% 29% 39% 32% 29% 34% 

(697,195) (181,448) (515,747) 6,978) (11,609) 

5% 6% 5% 7% 9% 6% 

(98,974) (37,193) (61,781) (1.646) (2,061) 

immunization: 

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 

Beneficiaries who went out-of-plan 

Beneficiaries went out of plan because: 

Enrollees Disenrollees 

1993 1996 1993 1996 

7% 6% 22% 10% 

(65,629) (113,168) (5,187) (5,144) 

Enrollees 1996 Disenrollees 1996 

. 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) 

Couldn’t get HMO services 15% 11% 

quickly enough (16,657) 

Didn‘t think they would have to 3% 20% 

(3,148) (1,001 , 

. Primary HMO doctor wouldn’t 9% 10% 

make referral to specialist 

Primary HMO doctor wasn’t 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 

Had no plans to leave their present 

Planned to leave because of a move. 

Planned to leave for reasons other than moving. 

Couldn’t leave, but wanted to. 

1993 

84 % 93 % 

(771,929, 

2% 

(22,317) (16:;4) 

4% 3% 

 1) (50,780) 

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 

Service Access Through Physician 

Received appointment with physician 

w/in l-2 days when verv sick. 

Primary physician explained treatment 

options. 

Physician failed to give needed 

Medicare-covered services. 

Physician failed to admit beneficiary to 

hospital when needed. 

Physician failed to refer beneficiary to a 

specialist when needed. 

Physician Attitudes/HMO Administration 

Physician did not take health 

complaints seriously. 

Cost most important to primary 

physician 

Experienced delays in receiving 

 services in past 6 months. 

fase of obtaining care was: 

Enrollees 

 Limit No Limits 

92 % 97% 

(233,233) (768,985) 

85% 91% 

(280,598) 

8% 

(26,111) (35Z7)

3% 1% 

(6.110) (8,241) 

6% 5% 

(11,235) (58,280) 

Enrollees 

 1 Limits No Limits 

16% 5% 

(58,381 

9% 8% 

(25,475) 14,317) 

16% 11% 

(41,497, (123,089) 

Disenrollees 

 Limit No Limits 

87 % 84 % 

(7,320) (17,717) 

68% 79% 

(6,742) (25,390, 

20% 11% 

(2,047) (4,136) 

8% 4% 

(522) (660) 

25% 12% 

(2,072) (3,313) 

Disenrollees 

 1 Limits No Limits 

24% 17% 

(2,418) (6,444) 

27% 18% 

(1,795) 

30 % 22 % 

(2,589) (6,495) 

 easy or very easy 

 neither easy nor hard 

 hard or very hard 

55% 70% 40 % 55% 

(184,029) (4,388) (21,128) 

35% 26% 29% 28% 

 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 

Service Access Through Physician 

Received appointment with physician 

 l-2 days when sick. 

Enrollees 

Aged Disabled 

96% 95% 

(982,645, (63,365) 

Disenrollees 

Aged Disabled 

85% 87 % 

(23,952, 

Primary physician explained treatment 

options. 

Physician failed to give needed 

Medicare-covered services. 

Physician failed to admit beneficiary to 

hospital when needed. 

89 % 92% 78 % 61 % 

 (73,799 ) 1,090) (2,176) 

3% 4% 11% 27% 

(62,609, (3,233) (5,265) 

1% 4% 4 % 19% 

(12,747) 

Physician failed to refer beneficiary to a 

specialist when needed. 

Physician Attitudes/HMO Administration 

Physician did not take health 

complaints 

Cost most important to primary 

physician. 

Experienced delays in receiving 

routine services in past 6 months. 

Ease of obtaining care was: 

4% 16% 13% 36 % 

(64,581) 2,935) (4,586) 

Enrollees Disenrollees 

Aged Disabled Aged Disabled 

7% 13% 17% 39% 

(127,608) (11,106) (7,943) (1,441) 

9% 5% 20% 24% 

(138,033) (4,030) (7,135) 

12% 23% 23% 34% 

(159,867) (15,463) (8,222) (1,101) 

 easy or very easy 

 neither easy nor hard 

 hard or very hard 

68% 45% 52% 45 % 

 (40,033 ) (24,640) ,640) 

27% 31% 29% 18% 

(517,876) (26,971) (13,834) 

5% 24% 18% 37% 

(85,526) (21,226) (8,616) (1.364) 

seriously. 

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 

 neither easy nor hard 

 hard or very hard 

70% 65% 57% 50% 

(403,291) (861,301 ) (17,760) 

23% 30% 24% 30 % 

(131,778) (395,847 , (3,314) (10,462) 

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 

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

II 
Table E-4: Point Estimates, Confidence Intervals, and Statistical Significance by Functional Status 

KEY: = statistical significance tested 

Proportion of beneficiaries: 

Physician did not take health complaints 

seriously. 

 = difference is significant at level 

1 + Functional Limits 

Point Estimate Standard Error 95% Confidence 

Interval 

Point Estimate 

ns = not significant at level 

No Functional Limits 

Standard Error 95% Confidence 

Interval 

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 

disenrollees 

Experienced delays in receiving non-routine 

services in past 6 months. 

9.37 2.70 4.1 - 14.7 8.35 0.98 6.4 - 10.3 

26.59 5.29 16.2 - 37.0 18.63 3.01 12.7 - 24.5 

enrollees 

disenrollees 

Ease of obtaining care was easy or very easy 

16.17 3.75 8.8 - 23.5 11.37 2.35 6.8 - 16.0 

29.76 6.86 16.3 - 43.2 22.07 2.42 17.3 - 26.8 

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 

disenrollees 

Primary physician explained treatment 

options. 

96.01 0.93 94.2 - 97.8 94.56 3.33 88.0 - 100.0 

85.00 2.41 80.3 - 89.7 87.09 6.40 74.5 - 99.6 

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 

disenrollees 

Physician failed to admit beneficiary to hospital 

when needed. 

3.36 0.68 2.0 - 4.7 3.67 2.02 0.0 - 7.6 

11 .oo 1.61 7.8 - 14.2 ** 27.54 8.91 10.1 - 45.0 

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 

Proportion of beneficiaries: 

Point Estimate 

Chronically Ill Not Chronically Ill 

Standard Error 95% Confidence Point Estimate Standard Error 95% Confidence 

Interval Interval 

Received appointment with physician within 

l-2 days when sick. 

enrollees disenrollees 95.56 86.30 2.20 3.32 91.2 79.8 -- 100.0 92.8 85.53 96.56 0.98 2.97 79.7 94.6 -- 98.5 91.4 II 

Primary physician explained treatment 

options. 

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

II 
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 

 of beneficiaries: 

Point Estimate Standard Error 95% Confidence 

Interval 

Point Estimate Standard Error 95% Confidence 

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 

disenrollees 

Experienced delays in receiving non-routine 

services in past 6 months. 

7.79 1.78 4.3 - 11.3 8.26 1.10 6.1 - 10.4 

18.48 5.23 8.2 - 28.7 19.8 3 3.45 13.1 - 26.6 

enrollees 12.07 2.41 7.3 - 16.8 12.9 3 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 

disenrollees 

Ease of obtaining care was hard or very hard 

23.00 2.25 18.6 - 27.4 29.96 2.89 24.3 - 35.6 

24.29 4.13 16.2 - 32.4 29.69 2.13 25.5 - 33.9 

� 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 report’s 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 HCFA’s 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 plan’s 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, HCFA’s ability to monitor access for all Medicare beneficiaries 

enrolled in managed care plans has been limited. We believe, however, that HCFA’s 

Quality Improvement System for Managed Care (QISMC) will strengthen our ability to 

 and enforce geographically-relevant access-to-care standards. Historically, 

HCFA’s and States’ reviews of managed care plans have focused on structural standards 
that have looked at a plan’s 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 plan’s 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 organization’s 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 HCFA’s 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 HCFA’s 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 selfmanagement education and bone mass measurement will be developed 

once regulations have been completed.