Competitive bidding for Medicare Part B clinical laboratory services

The traditional Medicare fee-for-service program may be able to purchase clinical laboratory test services at a lower cost through competitive bidding. Demonstrations of competitive bidding for clinical laboratory tests have been twice mandated or authorized by Congress but never implemented. This article provides a summary and review of the final design of the laboratory competitive bidding demonstration mandated by the Medicare Modernization Act of 2003. The design was analogous to a sealed bid (first price), clearing price auction. Design elements presented include covered laboratory tests and beneficiaries, laboratory bidding and payment status under the demonstration, composite bids, determining bidding winners and the demonstration fee schedule, and quality under the demonstration. Expanded use of competitive bidding in Medicare, including specifically for clinical laboratory tests, has been recommended in some proposals for Medicare reform. The presented design may be a useful point of departure if Medicare clinical laboratory competitive bidding is revived in the future.     

Fee-for-service Medicare in a competitive market environment

Since its inception, the Medicare Program has allowed for the participation of private health plans, but the relationship of private plans to the government-sponsored fee-for-service (FFS) plan has been the subject of debate. Increased payments to private plans, the introduction of regional preferred provider organizations (PPOs), and a mandated demonstration of price competition that includes FFS Medicare reflect an ongoing attempt to define the role of private plans. The purpose of this article is to explore the roles of private plans and FFS Medicare and to attempt to identify the advantages and disadvantages of each.     

Developing a competitive benefits program

Offering your employees the right fringe benefits can help staff morale soar, foster loyalty, and increase the chances that a top-notch job applicant will say yes to your job offer. This article suggests practical ways to offer a competitive benefits program without breaking the bank. It includes guidance about specific benefits and suggests a dozen more extra benefits employees value and a sample cafeteria-style fringe benefits plan. Finally, the article includes guidelines about creating and using your own benefits statement with your staff; along with a model statement form you can use or adapt to your needs.     

Competitive bidding in Medicare Advantage: Effect of benchmark changes on plan bids

Bidding has been proposed to replace or complement the administered prices that Medicare pays to hospitals and health plans. In 2006, the Medicare Advantage program implemented a competitive bidding system to determine plan payments. In perfectly competitive models, plans bid their costs and thus bids are insensitive to the benchmark. Under many other models of competition, bids respond to changes in the benchmark. We conceptualize the bidding system and use an instrumental variable approach to study the effect of benchmark changes on bids. We use 2006–2010 plan payment data from the Centers for Medicare and Medicaid Services, published county benchmarks, actual realized fee-for-service costs, and Medicare Advantage enrollment. We find that a $1 increase in the benchmark leads to about a $0.53 increase in bids, suggesting that plans in the Medicare Advantage market have meaningful market power.     

Regulating the cost of institutional healthcare through competitive bidding

A system for prospective rate setting based on the theory of auctions is proposed. In order to guarantee that competition will achieve public health goals, the State Health Planning and Development Agency will issue a limited number of patient day certificates. Hospitals can obtain these certificates by offering bids in the form of rate increases. Hospitals offering low rate increases will receive patient day certificates with authorized rate increases equal to their own proposed rate increases plus a bonus. Hospitals offering high rate increases will receive only a base rate increase equal to the smallest rate increase offered by any hospital. This approach enjoys the cost minimizing benefits of competition while restraining hospital capital expenditures.     

A tale of four cities: Medicare reform and competitive pricing

The current payment system for Medicare + Choice (M + C) plans is based on prices calculated from administrative records. This system has been criticized as arbitrary, inefficient, and unfair. Most Medicare reform proposals would replace the current payment system with some form of competitive pricing. However, efforts over the past five years to demonstrate competitive pricing for M + C plans have been blocked repeatedly by Congress, even when the demonstrations were directly responsive to a congressional mandate. In the absence of political support, a demonstration of competitive pricing may be infeasible, and Congress could be forced to take the risky step of implementing broad Medicare reforms with very little information about their effects.     

Role of laboratories in the clinical study of drug dependence

Clinical toxicological laboratory is involved in two different topics related to drug addiction: tests devoted to diagnosis and treatment of addicted and analyses for administrative and forensic purposes. A laboratory which analyses drugs of abuse has to guarantee reliability and performance of its services working with a quality system. It can be possible to differentiate between laboratories which perform only screening tests with immunological methods and laboratories which execute confirmations with a forensic meaning using chromatographic techniques. The primary biological matrix for this kind of tests is urine, although in some specific cases hair analysis can be a support of traditional investigations. Internet sites on specific topics can be of assistance for questions of different nature to be faced by a clinical toxicological laboratory.     

Developing clinical work processes in a state psychiatric hospital: A case study

The Texas Department of Mental Health and Mental Retardation applied the continuous quality improvement (CQI) concept of work process to the delivery of clinical services in each of its eight state psychiatric hospitals. Two different clinical processes were involved: (1) individualized psychiatric treatment and (2) medical treatment. The processes were then benchmarked against national leaders in the delivery of public psychiatric hospital services. This case study demonstrates the applicability of the work process concept to a clinical environment where it can function as a management tool that can significantly improve the quality and efficiency of services provided to individual patients.     

Developing a Medicare prospective payment system for inpatient psychiatric care

Under the Balanced Budget Refinement Act (BBRA) of 1999, the secretary of health and human services was mandated to implement a prospective payment system (PPS) for psychiatric inpatient facilities that were exempt from the Medicare inpatient PPS. This paper reviews the reason for the initial "distinct-part" exemption, describes research that has been conducted to inform the development of a psychiatric inpatient PPS, and examines some of the issues that must be addressed as a PPS is designed. In addition, some changes in the overall inpatient psychiatric hospital sector are discussed.     

Laboratory-acquired infections and injuries in clinical laboratories: a 1986 survey.

A mail survey of all 54 US State and Territorial Public Health Laboratories and the 165 Hospital Clinical Laboratories in Minnesota was carried out, soliciting information on laboratory-acquired infections and injuries for calendar year 1986. The aggregate infection incidence rates were 3.5/1,000 full-time equivalent (FTE) workers for hospital laboratories and 1.43/1,000 for public health laboratories. Injury rates were 21.2/100 FTE workers for hospital laboratories and 7.21/100 for public health labs.     

A comparison of existing and alternative competitive bidding systems for indigent medical care

Competitive bidding is gaining in popularity as a means of containing costs in indigent medical care programs. The economic implications of the bidding systems employed by Arizona and California are discussed in light of the existing literature. Two alternative bidding approaches are proposed for consideration by policymakers—the sealed bid ‘Vickrey’ auction and the ‘ascending Dutch’ auction. While the incentives it contains for providers are not optimal, the ascending Dutch auction has the greatest potential for effective implementation since it accomodates the realities of public sector budget constraints and political pressures for direct control over program expenditures.     

An analysis of competitive bidding by providers for indigent medical care contracts.

This article develops a model of behavior in bidding for indigent medical care contracts in which bidders set bid prices to maximize their expected utility, conditional on estimates of variables which affect the payoff associated with winning or losing a contract. The hypotheses generated by this model are tested empirically using data from the first round of bidding in the Arizona indigent health care experiment. The behavior of bidding organizations in Arizona is found to be consistent in most respects with the predictions of the model. Bid prices appear to have been influenced by estimated costs and by expectations concerning the potential loss from not securing a contract, the initial wealth of the bidding organization, and the expected number of competitors in the bidding process.