PacifiCare implements DME co-pay for Medicare+Choice plan

Thursday, February 28, 2002

SANTA ANA, Calif. - Managed Medicare patients got a jolt all across California Jan. 1 when PacifiCare Health Systems rolled out a new county-by-county co-pay fee schedule for seniors in their Secure Horizons HMO plan.

For durable medical equipment, seniors must now make a co-payment of $75 for any product or service that costs between $100 and $499; for products and service in excess of $500, the Medicare HMO beneficiary is responsible for 20%.

PacifiCare said the co-pay schedule, which has been implemented for all senior services, including hospitalization and pharmaceuticals, is a less drastic alternative to exiting the Medicare HMO market.

Almost one out of every seven Medicare beneficiaries enrolled in a Medicare+Choice plan last year was affected by plans that have withdrawn from the program. Approximately 15% of all Medicare beneficiaries are enrolled in Medicare+Choice programs, and 58% of those seniors carry PacifiCare, according to a March 2000 survey by Mathematica Policy Research.

"Since 1998, we have been capped at a 2% increase each year," said PacifiCare spokeswoman Cheryl Randolph. "If you look at medical costs, they're rising at 6-8% and pharmacy is 15-20%. Clearly, that 2% isn't covering the cost."

The DME co-pay is having a dramatic impact on seniors in California. One HME provider said she sold a concentrator to a customer after he figured that it would be cheaper to own one than rent one. HME