Prohibition of "gag clauses" in the Federal Employees Health Benefits Program--OPM. Notice of proposed rule making

The Office of Personnel Management (OPM) is proposing to amend the regulations to prohibit health benefit carriers participating in the Federal Employees Health Benefits (FEHB) Program from entering into contractual provisions with health care providers or health care workers that would include a provision for incentive payments as an inducement to reduce or limit communication with, or the delivery of health care services to, FEHB enrollees. The rule is intended to ensure providers' and health care workers' ability to communicate with, and advise patients of, any medically necessary treatment options.

Key challenges posed by the Clinton health care reform proposal

President Clinton's proposal assumes that the bureaucratic, regulatory, informational, and financial demands it places on the health care system may be feasibly met. The authors refute these assumptions and argue that the proposal restricts individual freedom while it requires less individual responsibility. They also challenge the lack of incentives for cost-conscious purchasing of health care and for taking greater responsibility for individual well-being and societal health. The article recommends that behavior that drives up the cost of health care for individuals and society should be strongly discouraged through disincentives.

Alberta's Acute Care Funding Project

Alberta initiated the Acute Care Funding Project (ACFP) in 1988, a new hospital funding system that institutes case mix budgeting adjustments to the global budget so that hospitals can be treated more equitably. The initiative is a significant departure in principle from the former method of funding. The ACFP is summarized and critiqued, and focuses on the inpatient side of the picture. The various elements of the project are discussed, such as the hospital performance index, the hospital performance measure, the Refined Diagnostic Related Group, case weights, typical and outlier cases, and the costing mechanisms. Since its implementation, the ACFP has undergone substantial changes; these are discussed, as well as some of the problems that still need to be addressed. Overall, the system offers incentives to reduce length of stay and to increase the efficiency with which inpatient care is provided.

The limits of marginal economic incentives in the Medicaid program: concerns and cautions

In January 1985, New York State implemented legislation that allowed for a 30 percent increase in Medicaid fees for physicians providing primary care services. This was intended to increase their levels of participation. Yet the outcome was not as expected. In upstate New York, the number of physicians participating in Medicaid each month actually declined; in New York City, the monthly rate of increase in participating physicians, which was part of the overall sharp rise in all licensed physicians, underwent a decline. Furthermore, utilization measures suggest that "procedural upgrading" might have become a problem in New York City. These results suggest that a marginal increase in New York State's low Medicaid fees will not have a positive effect on physician participation levels.

The proposed market for human organs

During the last decade there have been enormous advances in the transplantation of vital human organs--in particular, the kidney, lung, heart, liver, pancreas, and small intestine. Unfortunately, efforts to provide the benefits of these operations to patients have been severely hindered by limitations in the supply of organs--limitations that are a consequence of regulation prohibiting the use of market incentives to increase the supply. Markets for organs could take various forms: sales by living donors; sales of future interests in organs, to be removed on the death of the donor; and sales of organs of a recently deceased person by the family of the deceased. Two additional issues relate to the design of a market: the geographic scope of the market and rules of liability for the sale of diseased or defective organs.

Incentive payments to nursing homes based on quality-of-care outcomes

The federal Omnibus Budget Reconciliation Act of 1987 specifies that a state may establish a program to reward--through public recognition, incentive payments, or both--nursing facilities that provide the highest quality care to residents entitled to Medicaid. As state policymakers, providers, and advocates consider development of systems for rewarding quality in nursing homes, including incentive payments based on resident outcomes, theoretical and practical dilemmas must be addressed. The article examines the impetus for combining incentives with outcome measures and the conceptual dilemmas that outcome-based payments pose. Issues basic to successful implementation of incentive payments to nursing homes based on quality of care outcomes are also delineated.

Physician fee schedule update for calendar year 1992 and physician performance standard rates of increase for federal fiscal year 1992--HCFA. Notice

This notice announces the calendar year 1992 update to the Medicare physician fee schedule and the Federal fiscal year 1992 performance standard rates of increase for expenditures and volume of physician services under the Medicare Supplementary Medical Insurance (Part B) program as required by sections 1848 (d) and (f) respectively of the Social Security Act. The fee schedule update for calendar year 1992 is 1.9 percent. The physician performance standard rates of increase for Federal fiscal year 1992 are 10.0 percent for all physician services, 6.5 percent for surgical services, and 11.2 percent for nonsurgical services.

Universal health insurance through incentives reform

Roughly 35 million Americans have no health care coverage. Health care expenditures are out of control. The problems of access and cost are inextricably related. Important correctable causes include cost-unconscious demand, a system not organized for quality and economy, market failure, and public funds not distributed equitably or effectively to motivate widespread coverage. We propose Public Sponsor agencies to offer subsidized coverage to those otherwise uninsured, mandated employer-provided health insurance, premium contributions from all employers and employees, a limit on tax-free employer contributions to employee health insurance, and "managed competition". Our proposed new government revenues equal proposed new outlays. We believe our proposal will work because efficient managed care does exist and can provide satisfactory care for a cost far below that of the traditional fee-for-service third-party payment system. Presented with an opportunity to make an economically responsible choice, people choose value for money; the dynamic created by these individual choices will give providers strong incentives to render high-quality, economical care. We believe that providers will respond to these incentives.

Criteria and standards for evaluating intermediary and carrier performance--HCFA. General notice with comment period

This notice describes the criteria and standards to be used for evaluating the performance of fiscal intermediaries and carriers in the administration of the Medicare program beginning June 1, 1990. The results of these evaluations are considered whenever HCFA enters into, renews, or terminates an intermediary or carrier agreement or takes other contract actions; assigns or reassigns providers of services to an intermediary; or designates regional or national intermediaries. This notice is published in accordance with sections 1816(f) and 1842(b)(2) of the Social Security Act, which requires us to publish for public comment in the Federal Register those criteria and standards against which we evaluate intermediaries and carriers.

Diagnosis-related groups and general hospital psychiatry: the APA Study

Psychiatric units in general hospitals are exempt from diagnosis-related groups (DRGs), a system of per case prospective payment that is used for the majority of patients covered by Medicare. The American Psychiatric Association purchased a large hospital discharge data base and studied the potential impact of DRGs on psychiatric patients and inpatient psychiatric units in general hospitals. There was substantial inaccuracy in the psychiatric DRGs' prediction of resource use, which could lead to inappropriate discharge of patients and financial risk to hospitals that treat more severe cases. The authors advocate further research because psychiatry must anticipate prospective payment in the future.