Applause-eliciting punch lines were scarce at last week's American Hospital Association annual membership meeting in Washington, but one topic was a winner for nearly every speaker: provider-sponsored organizations.
The buzz at previous AHA Washington meetings typically revolved around the federal budget. And with the Clinton administration's plans to reduce Medicare hospital payments by more than $30 billion, that issue would have been a safe bet as the hot topic of this year's meeting.
But only talk of PSOs seemed to stir the attendees of this year's meeting.
Among the convention speakers were Sens. Jay Rockefeller (D-W.Va.) and William Frist (R-Tenn.), sponsors of a Senate bill that would allow PSOs to contract directly with Medicare under uniform federal standards. The senators were among the most warmly received presenters.
For their part, nine hospital groups including the AHA, the Catholic Health Association, the Federation of American Health Systems and Premier announced they had formed a coalition to support the PSO legislation.
The groups are likely to face stiff opposition from insurers, however.
Last week, the Blue Cross and Blue Shield Association launched its own campaign against PSO legislation. The Blues released a study showing that more than 1,000 state laws regulate Medicare HMOs operating in their jurisdictions. The Blues maintained that many of those state laws couldn't be duplicated at the federal level.
Insurers say the PSO legislation introduced in Congress will weaken regulation and consumer protections and result in insolvencies that will cripple Medicare.
The PSO bills introduced in the House and Senate would pre-empt current state insurance laws and subject PSOs to federal regulation for a four-year period. After that, authority would return to states that had regulations matching the federal rules.
"Medicare is not the place to road test inexperienced health plans," said Mary Nell Lehnhard, senior vice president of policy at the Blues.