Risk Adjustment or Risk Avoidance?

Federal officials were taken off guard recently by the announcement that nearly 100 managed-care plans had decided either to withdraw from the Medicare managed-care program or to end their participation in some regions of the country. More than 400,000 Medicare beneficiaries in 29 states are affected. They will have to seek new plans or re-enroll in the traditional fee-for-service Medicare program and pay for supplementary insurance.13 The exodus came in the wake of Congress's mandate that by the year 2000 the Health Care Financing Administration (HCFA) must introduce diagnosis-based risk adjustment into the formula for determining capitation payments to . . .