HCFA is hoping that when the Competitive Pricing Advisory Committee selects its final sites for the Medicare managed-care demonstration project, the third time is the charm.
Attempts to launch the project at the two original sites-Baltimore and Denver-fell victim to a number of issues, most notably opposition from local lawmakers and managed-care plans that complained about the program structure. They also criticized HCFA for not including local groups in the design of the pilot project. Both programs had a structure similar to the one being considered by the CPAC.
In the Baltimore case, the local plans were able to mobilize the area's Democratic congressional delegation, which put pressure on HCFA to pull the plug. The plan was dropped in fall 1996.
HCFA then moved on to Denver.
Again, plans and local lawmakers pressured HCFA to stop the demonstration. But in a letter to the American Association of Health Plans, then-HCFA Administrator Bruce Vladeck said the demonstration would go on as scheduled. The plans filed suit. After months of legal wrangling, U.S. District Judge Walker Miller in Denver put the program on permanent hold in the summer of 1997.
Vladeck said months later that after examining the bids HCFA received from plans in Denver, the demonstration would have saved Medicare about 12% on its managed-care payments.
