Mandatory HMO Enrollment in Medicaid: The Issue of Freedom of Choice

In areas where HMOs have enrolled a small proportion of the general population, physician participation is less in mandatory HMO programs for Medicaid beneficiaries than in fee-for-service Medicaid. But where HMOs have enrolled over one-quarter of the general population, participation rates are indistinguishable under the two systems. In those areas, mandatory enrollment restricts freedom of choice of provider. A plausible reason for this is that individual practice associations, which contract with large numbers of physicians with both fee-for-service and HMO patients, are becoming the lead form of HMO.