Medicare to Evaluate Value, Payment of ‘Social HMOs’

Whether "Social HMOs," which offer seniors "extras" such as delivered frozen meals, taxi rides to doctor appointments, home help and adult day care, can save the federal government money and keep the elderly out of nursing homes "isn't clear," USA Today reports. A "long-running experiment by Medicare," the nation's four Social HMOs were created in 1985 and now cover 85,000 seniors. Minnesota School of Public Health professor Robert Kane maintains that the plans "don't save money," as some plans are "dramatically overpaid, and there's no evidence we can find that they can keep people out of nursing homes." In contrast, Sam Ervin, president of Social HMO Senior Care Action Network, says Kane is "dead wrong," adding that his company's studies show that the program was "able to reduce long statys in nursing homes by 53%." He said that decrease "equates to savings for the states" because they "bear the burden of nursing home costs for patients unable to pay," USA Today reports. Still, Medicare itself might not save any money, Ervin said. The Medicare program by the end of the year is expected to issue a report that could "affect the future of Social HMOs," by recommending how Medicare should pay for the plans, USA Today reports. One option would maintain the same payment plan under which the government pays now -- "substantially" higher rates for frail elderly in Social HMOs than for those in traditional Medicare HMOs. HCFA also could recommend that the government reduce Social HMO payments to equal what it pays traditional Medicare HMOs. But "Social HMOs say [that] would spell the end of the program," USA Today reports, adding that traditional Medicare insurers have long complained that "the government isn't paying them enough." Thus, Congress "is likely to have to balance complaints about underpayment with the question of whether they should expand Social HMOs." Although a definitive study has yet to be completed, Walter Leutz, Brandeis University associate professor and member of the panel that constructed the model for the original Social HMOs, said that the programs "serve a valuable need in integrating medical and social services for the elderly," USA Today reports (Appleby, USA Today, 10/23).