M+C Plan County Exit Decisions 1999-2001: Implications for Payment Policy

The primary legislative response todiminishing private plan participation inthe Medicare+Choice (M+C) programsince 1999 has been substantial paymentincreases. Analysis of M+C decisions to con-tinue serving or drop counties from 1999-2000 and 2000-2001 reveals that paymentamounts, although important, did not havea consistent impact on these decisions.Plan decisions varied depending on theyear and the intention to continue partici-pating in M+C at all. Simulations showthat M+C plans were better off, on average,with the payment methodology imposed bythe Balanced Budget Act (BBA) of 1997than under the previous payment systemand that large payment increases wouldincrease plan retention.