Byline: Al Lewis Rocky Mountain News Staff Writer
Nearly a dozen health care groups sued Monday to stop a government pricing experiment they say could mean higher costs and reduced benefits for some Medicare recipients in Colorado.
``Don't impose this unfair demonstration on the thousands of people who rely on Medicare,'' said Steve O'Dell, president of the Colorado HMO Association, which is among those suing the federal Health Care Financing Administration.
The groups seek a temporary restraining order against the agency's Denver Medicare demonstration project, which would put Medicare payments to managed care companies up for competitive bid.
Managed care companies say that, with profits squeezed under the project, they may be forced to cut benefits or raise co-payments and premiums for some Medicare recipients.
A hearing date for the request has not been set, a spokeswoman for the U.S. District Court in Denver said. The health care groups hope to stop the project before a Thursday deadline under which managed care companies must submit their Medicare bids.
Other groups joining in the suit include the Colorado Association of Commerce and Industry, the Colorado Medical Society, Kaiser Foundation Health Plan of Colorado and Rocky Mountain Health Maintenance Organization Inc.
Despite objections expressed throughout the managed care industry, state government and Congress, the Health Care Financing Administration is moving forward with its experiment.
``We can't solve Medicare's financial problems without doing these kinds of demonstrations,'' said a spokesman for the administration in Washington. ``And we are not going to do anything that would harm beneficiaries.''
Health maintenance organizations now receive about $450 a month for every Medicare patient in their systems. But when the project begins Jan. 1, they will receive a lesser amount set by a competitive bidding process.
O'Dell said the concept of competitive bidding was not at the heart of his group's attempt to stop the project. The objections come from the details of the plan, which O'Dell said have not been fully disclosed and violate federal laws regarding bids submitted to government agencies .
The Health Care Finance Administration is ``introducing a bidding process without even disclosing how the bids will be evaluated, or how winners and losers will be decided,'' he said.
Organizations that do not submit bids by the Thursday deadline will be excluded from the Medicare system for three years.
The aim is to reduce the amount Medicare pays to managed care companies, and some observers have said it could mean $40 million a year less for locally operating HMOs.
So far, only one unidentified managed care company has submitted a bid, a Denver-area spokesman for the Health Care Financing Administration said. Karen Ignagni, president of the American Association of Health Plans, said her organization hopes to stop the project before Thursday.
Jim Hertel, publisher of the Colorado Managed Care newsletter, said he thinks HMOs have some legitimate issues with the proposed competitive bidding process, and he notes that state legislators, Gov. Roy Romer and members of Congress have voiced objections to the plan.
``It's surprising that the Health Care Financing Administration has been unresponsive not only to concerns being raised by HMOs, but the concerns being raised by political leaders,'' he said.
But even if the suit succeeds, the issues behind it will hardly be resolved.
``At the heart of the matter, the Health Care Financing Administration is going to have to find alternatives to current Medicare system, which is projected for bankruptcy early in next decade,'' Hertel said.
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Ralph Pollock of the Colorado Association of Commerce and Industry, left, and Steve O'Dell of the Colorado HMO Association conduct a press conference Monday to announce the filing of their lawsuit. By Steve Groer / Rocky Mountain News.
