The American Hospital Association has found two lawmakers to sponsor its provider-sponsored organization Medicare reform legislation.
Sens. Bill Frist (R-Tenn.) and Jay Rockefeller (D-W.Va.) are expected to introduce a bill this week allowing PSOs to receive capitated payments and enroll Medicare beneficiaries as long as most services are done by providers within the PSO.
Under the proposal, HHS would be required to set regulatory standards for the PSOs within 180 days of enactment of the law. The HHS rules would be in place for four years, and then states could take over regulation of the plans as long as their laws are the same as the federal standards.
States currently regulate HMOs, and managed-care groups say states should also regulate PSOs. Providers say, however, that the state rules favor traditional insurers and would put providers at a disadvantage.
The American Medical Association, which has a competing PSO plan, has objected to requirements that most of services be done by in-network providers. It argues that physician networks, which would not necessarily include a hospital, would be unable to furnish most services.
An AMA spokeswoman said the group was pleased that the bill would allow doctors to form networks.