Medicare

Medicare+Choice Plans
Serving Only Part of A County

In response to questions about whether a Medicare+Choice Plan can serve only certain areas within a county, we refer you to Medicare's Operational Policy Letter (OPL)#090, April 23, 1999 which can be found at http://www.cms.gov/medicare/op1090.htm. In general, the Centers for Medicare and Medicaid Services (CMS), which administers the Medicare program, approves the service areas of Medicare+Choice Plans on a county-wide basis as noted in OPL#090, the subject of which is "Service Area Requirements for Medicare+Choice (M+C) Coordinated Care Plans. The OPL provides general information and addresses six service area questions.

Under the county integrity rule as described in the OPL, CMS approves a Medicare+Choice Organization's (MCO) service area on a county-wide basis. If, however, the MCO demonstrates to CMS a valid reason to have less than a whole county certified, CMS has authority to approve a smaller service area. CMS is to look at a variety of factors, including the availability of service provider network resources, in determining whether to approve such a request. Four factors for consideration are:

whether proposed service areas are consistent with community patters of care;
whether proposed service areas are consistent with an M+C Organization’s commercial or state licensed service area;
whether the proposed service area discriminates against certain groups of Medicare beneficiaries; or
whether the proposed service area meets access and availability requirements.

Each MCO must have a CMS-approved service area. Service areas:

determine CMS’s payment rate to the MCO based on the counties included in the service area;
affect which benefits will be provided under the MCO plan, because benefits and premiums must be uniformly available to Medicare beneficiaries residing in the plan’s service area;
determine which beneficiaries are able to elect the plan, because organizations are obligated to enroll any eligible resident in the service area who elects the plan;
designate the geographical area within which the plan’s covered services must be "available and accessible"; and
designate the boundaries beyond which the organization assumes liability for urgently needed care.

As stated in the OPL, the agency's authority to approve service areas is §1856(b)(1) of the Social Security Act, 42 U.S.C. §1395w-26(b)(1)(establishment of other standards) which was added to the Medicare statute by the Balanced Budget Act of 1997, Public Law No. 105-33 (August 5, 1997). §1856(b)(1) is a general provision that authorizes the Secretary to set M+C standards by regulation. Standards-setting regulations were published at 63 Fed. Reg. 34971-34973 (June 26, 1998). The general requirements for Health Care Financing Administration (HCFA) approval of a M+C plan service areas are set forth in the preamble to the regulations. Note, HCFA is now the Centers for Medicare and Medicaid Services (CMS).