PPOs and PSOs began to appear in the market in 2005, but it was the emergence of PFFS
plans that really changed the landscape of the choice set in 2007 and 2008.
Exhibit 5: Ratio of actual to predicted monthly fee-for-service payments for Medicare Advantage disenrollees, for plans with more than 5,000 disenrollees, 2007-2008 Plan Type Ratio of actual to predicted monthly (# Disenrollees) FFS payments for disenrollees PFFS
A ** 1.
Some carriers responded to MIPPA by dropping out of the PFFS
program a year ago, and several players--including CIGNA Corp.
Increases mandated by the MMA and prior legislation have pushed payments to MA plans, including PFFS
plans, well above average per beneficiary costs for traditional FFS Medicare.
Currently, the PFFS
plans operate as indemnity plans within Medicare Advantage.
Live in the service area of the PFFS
insurer (The insurance company can limit its umbrella to only some parts of the country and may even restrict coverage to some counties within a state
Our simulations predict substantial market exit for the two main Medicare Advantage plan types that offer comprehensive benefits--CCPs and PFFS
plans--and modest plan entry for PDPs.
Beyond educating providers, one solution is for PFFS
plans to raise the reimbursement level above that of original Medicare, and adjust premiums accordingly.
Because changes in PFFS
offerings and enrollment may impact HMO and PPO offerings and especially enrollment, we also control for percent of Medicare beneficiaries in a county enrolled in a PFFS
plans in 2010.
plans (networked for ancillary services only) in 24 states
The lower revenue resulted from the elimination of several poor performing products, rate increases for Medicare Advantage products and phase-out of the PFFS
products in certain geographies.
In addition, stronger earnings and premium reductions due to the exit from the PFFS
business led to risk-based capitalization improvement.