The Reagan administration is taking a sizable step toward stricter regulation of an important segment of the medicare program - Health Maintenance Organizations. Often called HMOs, they are the fastest-growing segment of the health-care industry. In an appearance yesterday before Rep. Edward Roybal's Select Committee on Aging, William Roper of the Department of Health and Human Services said the administration intends to monitor HMOs more closely. Dr. Roper, who heads the division of HHS that administers medicare programs, also proposed a graduated series of financial and administrative penalties against HMOs that are improperly managed or fail to serve the needs of the elderly adequately.
HMOs are medical insurance plans that make payments to physicians based on the anticipated cost of keeping people healthy, rather than the traditional process of paying physicians to provide medical help to people who are ill. HMOs either have their own clinics, which offer most of these medical services, or have contracts with individiual physicians to provide such medical assistance.
The latest action is a shift in the administration's prior policy that favored less regulation. It goes part way in the direction favored by Representative Roybal (D) of California, Sen. John Heinz (R) of Pennsylvania, and other members of Congress. They favor tighter regulation of many aspects of two government-financed medical programs: medicare, which serves the elderly, and medicaid, which helps the indigent.
The Roper announcement follows the collapse of the largest HMO in the US, the International Medical Centers, which served some 135,000 older Americans in southern Florida.
The announcement may also have the effect of allaying concerns of the 900,000 Americans who belong to HMOs, as to whether the federal government will be monitoring how well other HMOs are serving their elderly patients.
Roybal is pressuring Roper to see that careful monitoring will be instituted, so that lessons from the south Florida situation will be learned. HMOs, Roybal says, ``can be the best of worlds, or the worst of worlds'' for aiding the elderly. He says closer monitoring will help make the difference.