[Congressional Record Volume 144, Number 85 (Thursday, June 25, 1998)]
[Extensions of Remarks]
[Pages E1232-E1233]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            THE MEDICARE CONTRACTING FLEXIBILITY ACT OF 1998

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                        Thursday, June 25, 1998

  Mr. STARK. Mr. Speaker, I am pleased to introduce the Medicare 
Contracting Flexibility Act of 1998.

[[Page E1233]]

  For years, we have been telling the Health Care Financing 
Administration (HCFA) to be a more prudent purchaser of health care. 
Now, we need to provide them with the tools to act more like a private 
company and hold Medicare contractors accountable.
  Specifically, the Medicare Contracting Flexibility Act would enable 
HCFA to contract with other types of companies besides health insurers 
to process claims for the Medicare program. Right now, the pool of 
potential contractors is limited and has been steadily diminishing, 
leaving HCFA at the mercy of the few contractors that remain. If one 
fails or has difficulty processing claims, HCFA is hard-pressed to find 
a replacement.
  This problem is especially evident in HCFA's inability to bring its 
contractors into compliance for the year 2000. Although several 
contractors are not yet in compliance, HCFA appears to have little 
leverage in forcing contractors to make the necessary system 
adjustments. This means that January 1, 2000, Medicare's claims 
processing system could malfunction, wreaking havoc throughout the 
provider community.
  The Medicare Contracting Flexibility Act would enable HCFA to solve 
this short-term problem by expanding the pool of potential contractors 
and fostering more competition among companies so that HCFA could get 
the best value and service for each taxpayer dollar spent.
  The Medicare Contracting Flexibility Act would also give HCFA the 
ability to solve long-term problems by laying the groundwork for other 
changes to the contracting program. For example, HCFA could set 
performance standards for contractors, or combine claims processing for 
Medicare Parts A and B under one contractor, as opposed to having two 
separate entities.
  All of these changes would translate into better, more effective 
service for the Medicare program, and ultimately the nation's 39 
million Medicare beneficiaries. I urge my fellow Members of Congress to 
join with me in passing the Medicare Contracting Flexibility Act. 
Together we can ensure that HCFA has the tools to be a more prudent 
purchaser of health care.

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