Applying the lessons of the competitive-pricing demonstrations

• Published in: Health affairs (Millwood, Va.) Va.), 2000-09, Vol.19 (5), p.55-56
• Main Authors: Thomas, B, Fishman, L E
• Format: Article
• Language: English
• Subjects: Beneficiaries; Bids; Bills; Bipartisanship; Budgets; Centers for Medicare and Medicaid Services (U.S.); Competition; Competitive Medical Plans - organization & administration; Drug Prescriptions - economics; Government agencies; Government programs; Health care expenditures; Health care policy; Health Care Reform - legislation & jurisprudence; Health Services Research; Humans; Insurance coverage; Legislation; Legislators; Legislatures; Managed Competition; Medicare; Medicare Part C - economics; Medicare Part C - legislation & jurisprudence; Modernization; Negotiations; Payments; Pilot Projects; Prescription drugs; Prospective Payment System - legislation & jurisprudence; Reforms; United States; Voting
• ISSN: 0278-2715; 1544-5208
• DOI: 10.1377/hlthaff.19.5.55

The bipartisan Medicare Rx 2000 Act (H.R. 4680) calls for new incentives and changes in the administrative environment based on the lessons learned from the Medicare+Choice (M+C) demonstration's history. It adopts M+C payment reforms and establishes a universal, voluntary, market-based prescription drug benefit for seniors as an alternative transition to fundamental Medicare reform. Moreover, these payment reforms will be implemented by a new administrative entity, the Medicare Benefits Administration. Many observers note that the Health Care Financing Administration has an inherent bias toward fee-for-service Medicare at the expense of M+C, which has been treated as the unloved stepchild of the agency and saddled with undue regulation. H.R. 4680 recognizes that stabilizing the M+C program and establishing a negotiation process on sound footing require a relatively modest financial investment, so that participants gain something, not be guaranteed reduced payments or immediate loss of benefits.