HR 676 - The Good and the Bad - Part 5

Continued from Part 1, Part 2, Part 3, and Part 4.

"Non-profit health maintenance organizations that actually deliver care in their own facilities and employ clinicians on a salaried basis may participate in the program and receive global budgets or capitation payments as specified in section 202."
"Other health maintenance organizations, including those which principally contract to pay for services delivered by non-employees, shall be classified as insurance plans. Such organizations shall not be participating providers, and are subject to the regulations promulgated by reason of section 104(a) (relating to prohibition against duplicating coverage)."

Ugly
So, these sections serve to clarify how different HMOs will be treated. Non-profit HMOs that provide care will be treated as service providers that can qualify for reimbursement by the federal plan. Other HMOs will be treated as insurance plans.

This probably has to do with cost containment and standardization, making it easier to prevent outsourced and possibly for-profit doctors or clinics from indirectly charging the federal plan for services that would be harder to efficiently monitor. We're still on section 103, and have not gotten to the later sections that explain payment more thoroughly. On the face of it, this seems potentially unnecessarily restrictive, and may strong-arm doctors to become salaried or capitated employees of non-profits. I admit to an incomplete understanding of HR676's rationale for requiring salaried or capitated providers. I will explore different payment types and their consequences in the future.

"Patients shall have free choice of participating physicians and other clinicians, hospitals, and inpatient care facilities."

Good
Most hospitals will be participants from the beginning. Many more will make the transition. Most people who already have health insurance are already familiar with "in-network" versus "out-of-network" providers, so this idea will not be confusing. The difference will be that "in-network" with HR676 means most facilities throughout the whole country.

Freedom of choice will also put pressure on facilities to be more competitive with regard to quality. Since services will be free to people under HR676, service differentiation (covered services) will involve quality instead of price. Low quality providers will be less able to rope in clients by cutting deals with third-party payers.

Bad
I am at a loss.