Applying competitive bidding to health care

This paper reviews the empirical literature on competitive bidding for health services under public programs and, in this context, discusses the major issues that must be confronted in designing bidding systems. These issues include the specification of units of service, the selection of winning bidders, the determination of reimbursement for winning bidders, the treatment of losing bidders, and contract enforcement. The paper then illustrates these issues in practice by outlining one possible competitive bidding system for purchases and rentals of durable medical equipment under the Medicare program.     

Predatory bidding in competitive tenders: A Swedish case study

Public procurement by competitive tendering is an important part of European policies to encourage competition in network industries previously dominated by public companies. In recent years, the appearance of very low bids has become an issue in several countries. We discuss predatory bidding from a theoretical, practical and legislative point of view. A case of tendering for train services in Sweden is used to illustrate the possibilities to detect an abnormally low bid. An analysis of projected costs and revenues is complemented with a method using historical data on previous tenders. One conclusion is that there is scope for reform in national competition policies in European Union member states concerning multinational enterprises participating in local tenders. JEL Classification K21 · K23 · L12 · L43 · L92     

Medicare program; establishment of the Medicare Advantage Program; interpretation. Final rule; interpretation

This final rule clarifies our interpretation of the meaning of "entity" in the final rule titled "Medicare Program; Establishment of the Medicare Advantage Program" published in the Federal Register on January 28, 2005 (70 FR 4588). Subsequent to the publication of the Medicare Advantage (MA) final rule on January 28, 2005, we have received inquiries from parties interested in offering an MA Regional Plan concerning whether they could jointly enter into a contract with us to offer a single MA Regional Plan in a multistate region. The participating health plans wish to contract with each other to create a single "joint enterprise." They have asked us whether such a joint enterprise could be considered an "entity" under sections 1859(a)(1)and 1855(a)(1) of the Social Security Act, for purposes of offering an MA Regional Plan. The MA final rule is scheduled to take effect on March 22, 2005. Our interpretation of the word "entity" that follows in the "Supplementary Information" section of this final rule is deemed to be included in that final rule.     

Considerations in Medicare reform: the impact of Medicare preemption on state laws

This article explores the key issues involved in understanding the impact of Medicare preemption on state laws affecting the federal purchase of managed care products, as a consideration in future Medicare reform. Author Commander Jackonis argues that any further Medicare reform must address the impact of federal preemption on quality and quantity of care purchased in order to ensure the existence of a market of product providers, as well as to ensure protection of patient rights and benefits.     

Medicare program; revision of the Medicare Economic Index--HCFA. Final rule

Before January 1, 1992, Medicare payments for physicians' services under Part B were limited by the Medicare Economic Index (MEI), which capped prevailing charges. Beginning January 1, 1992, Medicare payments for physicians' services under Part B are made based on a fee schedule. Annual updates to the conversion factor used in establishing the physician fee schedule are based in part on the MEI. This final rule revises the method used to calculate the MEI to more accurately reflect year-to-year price changes affecting the cost of providing physicians' services, thus ensuring appropriate adjustment of Medicare payments.     

Medicare program; establishment of an expedited review process for Medicare beneficiaries enrolled in health maintenance organizations, competitive medical plans, and health care prepayment plans--HCFA. Final rule with comment period

This final rule with comment period establishes a new administrative review requirement for Medicare beneficiaries enrolled in health maintenance organizations (HMOs), competitive medical plans (CMPs), and health care prepayment plans (HCPPs). This rule implements section 1876(c)(5) of the Social Security Act, which specifies the appeal and grievance rights for Medicare enrollees in HMOs and CMPs. This rule requires that an HMO, CMP, or HCPP establish and maintain, as part of the health plan's appeals procedures, an expedited process for making organization determinations and reconsidered determinations when an adverse determination could seriously jeopardize the life or health of the enrollee or the enrollee's ability to regain maximum function. This rule also revises the definition of appealable determinations to clarify that it includes a decision to discontinue services.     

Paying for the Medicare program

Although the hospital insurance (HI) trust fund acted as a source of strength for the old-age, survivors, and disability insurance program during its recent financial crises, projections by HCFA and CBO reveal that the Medicare program will experience financing problems of its own within the next decade. No one would argue that Medicare's financing problems should be solved simply by raising more money. However, the prospect of insolvency in the HI trust fund and the increasing strain on general revenues from the Supplementary Medical Insurance trust fund require policymakers to survey the options for increasing Medicare revenues while cost-control devices are being developed. Indeed, even if cost-control efforts are completely successful, additional revenues may be needed in the future to finance new initiatives in the Medicare program. Therefore, this paper will look briefly at current efforts to regain control of soaring hospital and physician costs and then examine some of the more feasible options for increasing Medicare revenues.     

Medicare program; explanation of enrollee rights and other provisions applicable to health maintenance organizations and competitive medical plans--HCFA. Final rule

This rule revises current Medicare requirements relating to health maintenance organizations and competitive medical plans. It eliminates the requirement that an organization enroll two new Medicare beneficiaries for each present Medicare enrollee converted from a cost to a risk contract (the "two-for-one" rule), expands the amount and type of information which an organization must provide to enrollees, and requires annual notice of enrollees' rights under the plan. This rule also authorizes HCFA to terminate a contract with an organization for noncompliance with the composition of enrollment standard requiring that no more than 50 percent of an organization's membership be comprised of Medicare or Medicaid enrollees (hereinafter referred to as the "50/50 rule") and authorizes sanctions when an organization fails to comply with the 50/50 rule or the terms of any waiver or exception to that rule. These provisions conform our regulations with changes made by the Omnibus Budget Reconciliation Acts of 1986, 1987 and 1989.     

Medicare program; reduction in Medicare Part B premiums as additional benefits under Medicare+Choice plans. Final rule

This final rule revises the regulations to provide for a Medicare+Choice organization to offer a reduction in the standard Medicare Part B premium as an additional benefit under one or more Medicare+Choice (M+C) plans. The legislation specifies that the reduction to the Medicare Part B premium cannot exceed the standard Medicare Part B premium amount and cannot be applied to surcharges. Surcharges are increased premiums for late enrollment and for reenrollment. The Medicare Part B premium may be collected by a variety of methods: Paid directly to the Centers of Medicare & Medicaid Services by the beneficiary; collected as an adjustment to any Social Security, Railroad Retirement, or Civil Service Retirement benefits; paid by an employer as part of an annuity package; or, paid by the State for individuals enrolled in a qualifying State Medicaid program. This legislation applies to benefits under Medicare M+C plans offered by an M+C organization electing this option, beginning January 1, 2003. This final rule revises the regulations to set out the basic rules under section 606 of the Medicare, Medicaid, and SCHIP Benefits Improvement Protection Act of 2000 (BIPA) for adjustment and payment of the Medicare Part B premium.