The Clinton administration's fiscal year 1997 budget slated for release March 18 will include a provider-sponsored-network proposal that provider groups say reflects positive movement from the last White House budget.
"The White House is clearly moving in our direction," said Richard Pollack, American Hospital Association executive vice president of federal relations. "This will be substantially better than the first (budget) plan, but there are still problems that need to be addressed."
Frederick Graefe, a Washington lawyer with Baker & Hostetler, said the plan was "a good starting point. It shows the (Clinton administration) is agreeable to moving ahead on PSNs, they are not throwing up roadblocks."
The White House plan will allow provider networks to contract directly with Medicare under federal certification guidelines, including solvency requirements, unless HHS deemed a state's requirements to be identical to the federal rules.
After the initial period of federal regulation, any state that had its certification and monitoring program approved by HHS would assume the oversight of PSNs.
The issue of federal regulation has vexed providers and insurers alike.
Providers have sought federal regulation of PSNs in an effort to avoid state insurance commissioners, whom the providers claim are sympathetic to insurers.
However, while the White House appears to be willing to allow PSNs to be certified under federal guidelines, there have been signals out of the administration that concerns over past managed-care debacles may lead to harsh federal regulations.
At last week's meeting of the American Association of Health Plans, HCFA Administrator Bruce Vladeck said he felt "very strongly" that "all participants in the Medicare program*.*.*.*ought to be subject to what are essentially the same rules."
Sherry Hayes, vice president of St. Paul, Minn.-based InterHealth, a Protestant healthcare organization, said that one of the most pressing questions for providers was "what the federal standards are going to be and for what period of time."