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Date: Tuesday, June 27, 1995
For Release:  Immediately
Contact: HCFA Press Office (202) 690-6145

"The Medicare Choices demonstration is one of several elements of the president's plan designed to expand managed care options for Medicare beneficiaries and improve Medicare payment methods for managed care plans, including a competitive bidding demonstration," said HCFA Administrator Bruce C. Vladeck.

"It will help give the president's managed care proposals a jump start," Vladeck said.

HCFA has already begun soliciting contractor support for three other elements of this initiative. These include design of a Medicare competitive bidding demonstration; development of a marketing strategy to inform beneficiaries of Medicare choices; and studies of managed care issues, such as development of access measures that are appropriate for managed care.

HCFA invites a wide range of managed care plans to participate in its Choices demonstration, including preferred provider organizations, health maintenance organizations and integrated delivery systems. Currently, most Medicare managed care contracts are with HMOs. Applications are especially sought from such managed care plans in Hartford, Conn.; Philadelphia, Pa.; Atlanta, Ga.; Jacksonville, Fla.; New Orleans, La.; Columbus, Ohio; Louisville, Ky.; Houston, Texas; and Sacramento, Calif.

"We believe these markets have the greatest potential for expanding choices to Medicare beneficiaries based on available options in the private sector," Vladeck said. "With this administration's commitment to expanding voluntary choices for Medicare beneficiaries, we believe it's important to experiment with a wide variety of types of plans.

"While we are targeting these markets, we will accept other types of innovative applications from other areas. For example, we would like applications from plans offering to extend their networks to rural communities and plans emphasizing primary care case management procedures," Vladeck said.

To participate in the demonstration, all plans must:

• Have networks that can provide the full range of Medicare Part A and Part B services.

• Demonstrate financial viability and be willing to bear some risk. However, HCFA will consider a variety of payment arrangements.

• Have a well-developed quality assurance program.

• Have demonstrable data system capability, including the ability to produce encounter data or the ability to work with HCFA to produce such data.

The Health Care Financing Administration is the federal agency that runs the Medicare program.