Laws allowing limited demonstrations of MSAs were enacted in 1996 for the general population, and in 1997 for Medicare beneficiaries. Sometimes referred to as Medicare Part C, this portion of Medicare was established by the Balanced Budget Act of 1997. Benefits may include payment of Medicare deductibles, coinsurance, balance bills, and payment for services not covered by Medicare, such as outpatient prescription drugs. Typically, insurance companies and government health programs like Medicare and Medicaid are the major payers. A legal entity formed and owned by one or more hospitals and physician groups to obtain payer contracts and to further mutual interests.
Physicians maintain ownership of their practices while agreeing to accept managed care patients.
The PHO serves as a negotiating, contracting, and marketing unit. The increase in POS enrollment represents the area of greatest HMO growth. The method used by Medicare to pay for inpatient hospital services and skilled nursing facility care, in which payment rates are determined before services are rendered, and not based on actual costs or charges of a specific facility. Rates are intended to cover treatment costs for a typical inpatient with a given diagnosis and are adjusted for the hospital's wages, teaching activity, indigent care, and other factors. The BBA of 1997 requires PPS payments be developed for rehabilitation hospitals, home health agencies, and, possibly, long-term care hospitals.