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Providence Plan halts Medicare Choice HMO By Bill Kettler Lower-than-average reimbursements from the federal government have prompted Providence Health Plan to stop providing Medicare Choice HMO insurance coverage in Southern Oregon. The decision will force nearly 4,800 seniors in Jackson and Josephine counties to find a new Medicare Choice provider. Providence officials announced Wednesday that they would also stop offering their Medicare Choice insurance, marketed as "Medicare Extra," in Clatsop and Tillamook counties and four southwest Washington counties: Pacific, Lewis, Cowlitz and Wahkiakum. The decision will affect 7,600 seniors in the eight predominantly rural counties. Providence will send letters to all affected subscribers and call them to discuss their options during the summer. They will retain their traditional Medicare coverage. Medicare pays health providers a fixed monthly payment for each member, and members usually pay an additional monthly premium for health care. Medicare reimbursements vary regionally because doctors have different treatment styles. Regions that have high per-patient costs get bigger Medicare reimbursements. Regions that have low per-patient costs, such as Oregon, get smaller reimbursements. Per-patient Medicare costs in 1997 ranged up to $8,690 in Miami, compared to $3,917 in Medford. Greg Van Pelt, Providence Health Plans chief executive, said low federal reimbursement for Medicare patients was a primary reason for leaving the Medicare market. Growing costs for drugs and high-technology medical equipment increased the costs of providing health care for Medicare recipients. Van Pelt said Providence would have received $44 million more in Medicare Choice reimbursements if Oregon beneficiaries were funded at the U.S. average. Providence�s Medicare programs in Jackson and Josephine counties recorded losses of nearly $3.2 million from 1997 to 1999. The program overall had medical losses of nearly $12 million during 1999. Providence is not the first health insurance provider to abandon the Southern Oregon market. PacifiCare stopped offering its Secure Horizons Medicare Choice program at the end of 1999. Providence�s departure from the Medicare Choice market leaves Regence BlueCross BlueShield as the region�s major provider of Medicare Choice health insurance. Obituaries | Sports | Business | Classifieds | Tempo | Prime Times | So Oregon Sites | Outdoor Journal | Subscribe | Contact | Movies | Advertise | Real Estate Showcase | Archive | Editorials | Letters to the editor | Religion | Wake-up Call | NIE | Cyber Chef | Job Network | So Oregon Weather | WSJ Northwest | Forums | AP Wire | AP Money | F.A.Q. | Awards Ottaway Newspapers, Inc. The Community Newspaper Subsidiary of Dow Jones & Co, Inc Copyright �The Mail Tribune 2000, Medford, Oregon USA