The Senate is expected to vote this week on legislation that would scuttle a HCFA project demonstrating competitive bidding by Denver-area Medicare HMOs.
The Senate Appropriations Committee has adopted unanimously an amendment that would kill the controversial project. The amendment, sponsored by Sen. Ben Nighthorse Campbell (R-Colo.), was attached to a bill adding money to the 1997 federal budget, which is expected to pass the full Senate.
Denver-area HMOs opposed the demonstration, saying HCFA did not give them enough time to respond or clear rules about how their bids would be evaluated. However, they did express a willingness to work with HCFA to do a competitive-bidding demonstration.
"It's not clear what HCFA is trying to accomplish except to take money out of HMOs' pockets," said Steve O'Dell, president of HMO Colorado, a Blue Cross plan, and of the Colorado HMO Association.
HCFA sent Denver HMOs their bid specifications April 2 and set a bidding deadline of May 15.
Under the existing plan, HCFA would evaluate the bids and then set a payment rate that would apply to all risk plans in Denver. Plans with bids higher than the HCFA payment rate would be given a choice of accepting the lower payment rate or charging a higher premium to their enrollees. Plans with lower bids could add benefits or keep the surplus.
If the Senate bill is enacted, Denver would be the second city for which the demonstration has been rejected. HCFA scrapped a competitive-bidding project in Baltimore after receiving pressure from Democratic lawmakers there.