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KAISER PERMANENTE SEEKS MEDICARE RISK CONTRACT FOR 1994

 OAKLAND, Calif., May 6 /PRNewswire/ -- The Northern California Region of Kaiser Permanente announced plans this week to enter into negotiations with the federal Health Care Financing Administration (HCFA) in order to offer a Medicare Risk contract in 1994, which could save existing Medicare members at least $10 a month. Specific details on rates, benefits and service areas in which it will be offered still need to be worked out and are subject to the negotiations and HCFA's 1994 payment rates.
 Under a risk contract, Medicare makes a monthly "dues" payment for covered beneficiaries who are required to obtain all services through that health plan similar to non-Medicare HMO members. The health plan has more opportunities to organize health care services more efficiently and cost-effectively. The savings are passed on to both Medicare (which calculates its payment as being equal to only 95 percent of what it would otherwise expect to be billed for) and through increased supplemental benefits or reduced rates for the health plan's supplemental benefits.
 Currently Kaiser Permanente in Northern California only offers a cost-reimbursement supplemental plan. Medicare members in this plan pay monthly dues to Kaiser for coverage of Medicare deductibles and some supplemental benefits, but can go to any Medicare-approved provider for Medicare-covered services. Both Kaiser and the other providers bill Medicare for services provided.
 "The window of opportunity to help our Medicare members is here," said Jerry Fleming, vice president and manager of Kaiser's Northern California health plan. "In the past two years we have added the facilities and staff needed to provide more of the services directly ourselves. A number of unions and employer groups have been encouraging us to consider a risk contract to improve the affordability of health benefits to their retirees, and we now have the capability to do it."
 Kaiser Permanente embarked on a major facilities development program in the late 1980s when record membership growth exceeded forecasts and Kaiser's ability to provide services directly themselves. Kaiser Permanente already has Medicare Risk contracts in other areas of the country.
 Fleming said development of the contract application and approval would take several months, but the new option probably would be available sometime in early 1994. It will be made available on contract renewal dates following federal approval.
 -0- 5/6/93
 /CONTACT: Beverly Hayon of Kaiser Permanente, 510-987-2703/


CO: Kaiser Permanente ST: California IN: HEA SU:

GT-TM -- SF014 -- 5619 05/06/93 16:07 EDT
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Publication:PR Newswire
Date:May 6, 1993
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