Experiments Have Not Demonstrated Success of Competitive Fixed-Price Contracting in Medicare.

At the request of Chairman Rangel, we have reviewed the three experimental fixed-price contracts in Medicare part B as a followup to our June 29, 1979, report to the Congress, More Can Be Done to Achieve Greater Efficiency in Contracting for Medicare Claims Processing HRD-79-76. As requested, our review focused principally on the experimental contract in Illinois. We also addressed the Health Care Financing Administrations progress in implementing contractor performance standards and in carrying out other recommendations in our June 1979 report. We requested comments from the Department of Health and Human Services, the Health Insurance Association of America, the Blue Cross and Blue Shield Associations, and the three contractors involved in the experiments. Written comments were received from all parties, except one experimental contractor, and were considered in finalizing the report.