MEDICARE HMOs: Bee Calls For Competitive Rate- Setting
Concluding that the reason many HMOs are pulling out of the Medicare system is because its "existing payment system is hopelessly flawed," a Modesto Bee editorial calls for the federal government to emulate the California Public Employees Retirement System (CalPERS) in reimbursing HMOs for Medicare enrollees. The Bee says it is "nuts" to determine "a different payment for HMOs depending on where the enrollee lives," and that a better way would be to emulate the model used by CalPERS where HMOs "compete by submitting bids." CalPERS then "reviews the bids and establishes a baseline contribution toward an enrollee's health care. Enrollees can either choose health plans that have premiums at or below this baseline or elect to pay more for plans with higher premiums, perhaps one that offers a broader choice of specialists." The editorial concludes, "Until the federal government and Congress realize that a competitive bidding process does a better job than bureaucrats at setting reasonable rates for Medicare HMO services, seniors are in for more musical chairs with their health system" (10/27).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.