Don't compete on prices, judge orders
Don’t compete on prices, judge orders
The Denver Medicare demonstration project on price competition can’t proceed as planned because of a ruling in late May from a Federal District Court ruling in Denver.
The Medicare project, sponsored by the Baltimore-based Health Care Financing Administration, requires health plans servicing the Denver area that participate in Medicare to participate in the three-year project or to be excluded from the program for the duration of the project. (For more information on the project, see Subacute Care Management, March 1997.)
The restraining order issued in late May lasts until mid-June. The demonstration project is not scheduled to begin, however, until 1998. At that time, a hearing on the plaintiffs’ motion for a preliminary injunction will be held. Plaintiffs in the case include the Washington, DC-based American Association of Health Plans, the Colorado HMO Association, the Colorado Association of Commerce and Industry, and the Denver-based Colorado Hospital Association, among others.
The plaintiffs argue that the government bypassed its "usual rulemaking process in changing terms for plan participation in Medicare, " according to a printed statement. The suit also challenges the government’s authority to disrupt a successful program by instituting a bidding process without disclosing how bids will be used to determine the payment plans received for the care of their beneficiaries.
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