Medicare and Medicaid HMO incentive plan rules change.

Physicians and physician groups that participate in incentive plans offered by Medicare and Medicaid HMOs may be affected by a change in the rules pertaining to such plans. The change, which became effective January 1, 1997, sets a threshold percentage for substantial risk sharing for referral services; obliges HMOs to conduct annual enrollment surveys; and requires HMOs that contract with physician groups that serve 25,000 or fewer patients to obtain stop-loss protection. In addition to these rule changes, Medicare and Medicaid HMOs are now required to disclose information about physician incentive plans to Medicare and Medicaid beneficiaries who request it and report changes in incentive plans to HCFA at least 45 days before they take effect. Physicians should familiarize themselves with the changes pertaining to incentive plans to ensure that the Medicare and Medicaid HMOs with which they contract are in compliance and that they do not assume an excessive degree of financial risk for referral services.