Rural Response to Medicare+Choice: Change and Its Impact

Funder:	Agency for Health Care Policy and Research (AHCPR)
Research center:	Rural Policy Research Institute (RUPRI) Center for Rural Health Policy Analysis Phone: 402.559.5260
Lead researcher:	Keith J. Mueller, PhD , 402.559.5260, kmueller@unmc.edu
Project completed:	July 2002
Topics:	Health care financing Medicare

This project investigates an important trend in health care delivery and finance--the spread of managed care plans into rural areas. We will:

• Test hypotheses predicting the circumstances under which rural providers will take at least the initial steps to create Provider Sponsored Organizations or managed care plans under state authority;
• Test hypotheses predicting expansion of Medicare managed care into some rural counties vs. others; and
• Develop hypotheses concerning the consequences of rural provider participation in Medicare managed care plans.

The research design includes an empirical summary of changes in enrollment in Medicare managed care plans by type of county, including: rural remote, rural adjacent to metropolitan areas, and metropolitan; a survey of state offices of rural health repeated every six months, designed to measure and describe activities by rural providers in response to changes in Medicare policies; and case studies of two communities the first year and two the second year, including site visits, to gather detailed information

Publications

• Can Payment Policies Attract M+C Plans to Rural Areas?
  Author(s): Timothy McBride, Joan Penrod, Keith Mueller, Courtney Andrews, Micah Hughes
  Report Number: Rural Policy Brief Vol. 6, Number 8 (PB2001-8)
  Date: 05 / 2001
  Presents information on some of the factors that discourage insurance plans from offering Medicare managed care plans in non-metropolitan counties. Lists three policy levers other than payment rates that might give rural beneficiaries access to the same benefits as urban beneficiaries. 1) Combine counties into service areas for purposes of M+C payment to make the areas more attractive to managed care plans. 2) Use risk-adjusted fee-for-service payment and abandon geographically based M+C payment rates. 3) Accept that traditional fee-for-service Medicare will be the only option for many rural beneficiaries and focus on equity in payment policies and expansion of Medicare benefits.