HMOs and Managed Care

Center for Managed Care Established in Federal Government. On September 3, 1998, the Federal Register announced the new organizational statement regarding the establishment of the Center for Managed Care (CMC) in the Health Resources and Services Administration (HRSA). The Center was established in 1996. The new statement declares that the Center will serve as the focal point within HRSA for "leadership, coordination, and advancement of managed care systems for safety net providers serving at risk, vulnerable populations and for training programs for health professionals." It will "provide leadership within HRSA for the development of managed care policies and programs and in coordinating policy development with other Departmental agencies." It will also provide technical and other support to HRSA components and other mission related agencies as they establish managed care initiatives." The Center will provide training "in all aspects of managed care including dissemination of best practices" and develop "working relationships with the private managed care industry to assure mutual areas of cooperation, maximization of expertise and coordination" and assess "new and existing managed care systems." Finally the CMC will be responsible for "assur[ing] effective development of policies, resources, program development and resolution of program barriers and issues through working with "Foundations, private agencies and other Federal, State, and local agencies."




Supreme Court: HMOs Declared Government Agents. On August 12, 1998, a federal appeals court ruled that Medicare patients are entitled to an immediate appeals process when HMOs deny access to care. (5 days instead of 14 days) According to the Minneapolis Star Tribune: "The appellate court said that in running the Medicare HMO program, federal officials had not fulfilled their duty to guarantee due process, as required by the Fifth Amendment to the Constitution. Indeed, it said, Medicare officials have not enforced their own rules and have improperly renewed contracts with HMOs that violated the rules."
"[Judge Charles] Wiggins said Medicare beneficiaries were entitled to due process because the HMO decisions amount to 'government action.' HMOs are private corporations, but when they deny services to Medicare beneficiaries they act 'as a governmental proxy,' he said" (August 14, 1998, Star Tribune)