Federal Register / Vol. 63, No. 112 /Thursday, June 11, 1998 / Notices 32015

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Health Care Financing Administration

[HCFA–1104–N]

RIN 0938–AI26

Medicare Program; Notice for the

Solicitation for Proposals for a Case

Management Demonstration Project

Focused on Congestive Heart Failure

or Diabetes Mellitus

AGENCY: Health Care Financing

Administration (HCFA), HHS.

ACTION: Notice.

SUMMARY: This notice announces

HCFA’s solicitation for proposals for a

demonstration project that will use

existing, innovative case management

interventions to improve clinical

outcomes and quality of life for

beneficiaries with congestive heart

failure or diabetes mellitus who are in

the Medicare fee-for-service program

under Parts A and B, and that will

provide for Medicare program savings

through efficient provision and

utilization of services and the

prevention of avoidable, costly medical

complications (or consequences) that

may require hospitalizations. HCFA

requires that the proposed savings, at a

minimum, be sufficient to cover the

payments made for the case

management services. This notice

contains critical information for

interested applicants, including the

instructions for timely submission of the

required letter of intent and the

proposal. Interested applicants may

propose projects focusing on case

management of congestive heart failure,

diabetes mellitus, or both.

HCFA intends to select a maximum of

two proposed projects for this

demonstration. The selected proposals

will be those that best meet the

evaluation criteria. HCFA intends to

operate the demonstration project(s) for

three years from implementation.

DATES: Letters of intent must be received

by the HCFA project officer on or before

July 13, 1998.

Proposals (original and 10 copies),

each with a copy of the timely letter of

intent, must be received by the HCFA

project officer on or before September 9,

1998.

ADDRESSES: Mail letters of intent and

proposals to: Department of Health and

Human Services, Health Care Financing

Administration, Attention: Catherine

Jansto, Project Officer, Center for Health

Plans and Providers, Mail Stop: C4–17–

27, 7500 Security Boulevard, Baltimore,

Maryland 21244–1850.

Letters of intent may also be

submitted electronically to the

following E-mail address:

HCFA1104N@hcfa.gov. Electronically

submitted letters of intent must be

submitted to the referenced E-mail

address in order to be considered. The

complete letter of intent must be

incorporated in the E-mail messages

because we may not be able to access

attachments. Proposals may not be

submitted electronically.

Only proposals that are received

timely, and for which a timely letter of

intent is received, will be reviewed and

considered by the technical review

panel.

FOR FURTHER INFORMATION CONTACT:

Catherine Jansto at (410) 786–7762, or

CJansto@hcfa.gov.

SUPPLEMENTARY INFORMATION:

I. Background

A. Problem

Historically, a small proportion of

Medicare beneficiaries have accounted

for a major proportion of Medicare

expenditures. For example, in 1993

roughly 10 percent of the Medicare

beneficiaries accounted for 70 percent of

the $129.4 billion in total Medicare

expenditures. Hospital payments

accounted for a major proportion of this

expense.

We believe Medicare beneficiaries

with congestive heart failure and

diabetes mellitus are a population for

whom innovations in care through

effective case management interventions

may improve clinical outcomes and the

quality of life for the following reasons:

• Research suggests that some

complications related to congestive

heart failure and diabetes mellitus are

avoidable; and

• Control of these diseases requires a

complex treatment regimen.

Research also suggests that

individuals with congestive heart failure

or diabetes mellitus may suffer fewer

adverse health outcomes and that

additional more costly care might be

avoided if these patients adhere to

treatment regimens or receive adequate

post-hospital care. Although neither

congestive heart failure nor diabetes

mellitus can be cured, careful adherence

to recommended lifestyle changes and

medication regimens can control

symptoms, reduce complications, and

improve the quality of life. These

lifestyle changes and medication

regimens may include restrictive diets,

weight loss, exercise programs, careful

self-monitoring of symptoms, and

multiple medications that must be taken

as prescribed, monitored with blood

tests, and adjusted if indicated.

However, both recommended lifestyle

changes and medication regimens can

be difficult for patients to understand

and maintain. Indeed, among

individuals with either congestive heart

failure or diabetes mellitus,

nonadherence to treatment regimens has

been identified as a major contributor to

exacerbations of symptoms and to

preventable hospitalizations. The

Agency for Health Care Policy and

Research’s 1994 clinical practice

guidelines for congestive heart failure

recommend, as a key element of

comprehensive care, that ‘‘after a

diagnosis of heart failure * * * all

patients should be counseled regarding

the nature of heart failure, drug

regimens, dietary restrictions, symptoms

of worsening heart failure, what to do if

these symptoms occur, and prognosis.’’

Similarly, patients diagnosed with

diabetes mellitus also should be

counseled regarding appropriate

measures for management of their

disease. Recognizing the importance of

patient education as a component of a

comprehensive plan of care for

diabetics, section 4105 of the Balanced

Budget Act of 1997 (Pub. L. 105–33,

enacted on August 5, 1997) expanded

coverage for diabetes outpatient selfmanagement training. Thus, at a

minimum, individualized patient

education and counseling to improve

understanding of, and adherence to,

complex self-care regimens should be

basic features of case management

models for patients with congestive

heart failure or diabetes mellitus.

However, models may be more complex,

including frequent monitoring of

patients’ signs and symptoms,

adherence to the prescribed treatment

plan, as well as other sophisticated

interventions.

While case management interventions

may not result in the same level of

measurable improvements in all

beneficiaries with congestive heart

failure or diabetes mellitus, properly

identified patients have the potential to

benefit significantly. Beneficiaries who

are likely to experience avoidable

hospitalizations are prime candidates

for case management interventions that

will identify medical problems early,

improve treatment regimen compliance,

and coordinate post-hospital care. The

expectation is that a case management

intervention that achieves these

improvements will reduce overall costs

substantially by reducing the frequency

of hospital admissions and other costly

aspects of treatment. The case

management intervention is expected to

maintain or improve the quality of care.

Based in part on the potential for

chronic care case management to
32016 Federal Register / Vol. 63, No. 112 /Thursday, June 11, 1998 / Notices

improve beneficiary health status and to

lower costs through reduced

hospitalizations and disease

complications, HCFA sponsored a series

of case management demonstrations.

These demonstrations, mandated by

section 4207(g) of the Omnibus Budget

Reconciliation Act of 1990 (OBRA ’90),

Pub. L. 101–508, included case

management approaches aimed at a

number of chronic illnesses, including

congestive heart failure. Specifically,

the legislation called for demonstrations

to ‘‘provide case management services

to Medicare beneficiaries with selected

catastrophic illnesses, particularly those

with high costs of health care services.’’

The resulting demonstrations were

implemented in three sites, AdminaStar

Solutions, Iowa Foundation for Medical

Care (IFMC), and Providence Hospital.

The projects began operation in October

1993 and continued through November

1995.

Although all three demonstration sites

generally focused on increased

education regarding proper patient

monitoring and management of the

specified chronic condition, the targeted

conditions and case management

protocols differed in each site. The

AdminaStar site focused exclusively on

congestive heart failure, the IFMC

project focused on congestive heart

failure and chronic obstructive

pulmonary disease, and the Providence

Hospital site case management

intervention applied to a wider range of

chronic conditions. None of the projects

were aimed specifically at diabetes case

management. Rather, these projects

varied in the extent to which

management of diabetes as a co-morbid

condition was addressed. At the start of

the project, all three sites anticipated

sharply reduced hospitalizations and

lower medical costs compared to the

beneficiary control groups.

B. Evaluation and Findings

The legislation required a formal

evaluation of the project. The evaluation

(Costs and Consequences of Case

Management for Medicare Beneficiaries,

NTIS: PB98–103328), performed by

Mathematica Policy Research, Inc.,

found the following:

• The three demonstration projects

successfully identified and enrolled

populations of Medicare beneficiaries

who were likely to incur much higher

than average Medicare reimbursements

during the demonstration period. In all

three sites, beneficiaries with chronic

illnesses who were identified for the

project used far greater resources than

those in the general Medicare

population.

• Each project encountered

unexpectedly low levels of enthusiasm

for the demonstration from beneficiaries

and their physicians. For all three sites,

recruiting volunteer beneficiaries was

more difficult than anticipated, and

refusal rates were sometimes as high as

90 percent. Although the project teams

engaged in outreach activities,

participation by and coordination with

beneficiaries’ physicians was difficult.

• The projects failed to improve client

self-care or health, or to reduce

Medicare spending, despite engendering

high levels of satisfaction among the

high cost, chronically ill beneficiaries

who eventually participated.

Comparisons of health status, functional

status, and expenditures between the

control and the intervention groups

showed no improvements due to the

case management intervention.

The evaluation report suggested the

following primary reasons for the lack of

outcome and cost impacts found in

these case management demonstrations:

• The clients’ physicians were not

involved in the interventions. The

evaluation study found that case

managers received little or no

cooperation from clients’ physicians.

Despite outreach by the case managers,

most physicians provided little

interaction with the case managers, and

few opportunities for constructive

rapport developed. The case managers

at all three projects indicated that they

would have been more effective if their

activities had been coordinated with the

clients’ physicians’ advice, and if these

physicians had generally supported the

case management efforts.

• The projects did not have

sufficiently focused interventions. Even

at the two demonstration sites that

focused specifically on congestive heart

failure, little guidance was built into the

interventions regarding the types of

activities to be emphasized, how often

to contact and monitor clients at

different levels of severity, or the

content of the education provided.

• The projects lacked staff with

sufficient case management expertise

and the specific clinical knowledge to

generate the desired reductions in

hospital use. The case managers in these

projects, virtually all of whom were

nurses, received only a few days of

initial training to review project

procedures and clinical topics; however,

some completed additional in-service

training or attended seminars. This

limited training may have been an

inadequate substitute for more

comprehensive experience or

background in the specific target disease

and in community-based care or case

management.

• The projects had no financial

incentives to reduce Medicare spending.

In these projects, the case management

intervention focused on providing

education or arranging services, but had

no target outcomes (for example,

holding hospital readmission rates at or

below a pre-determined level) upon

which manager reimbursement was

based. In addition, since the clients’

physicians played almost no role in

these interventions, there was no

incentive for the providers of care to

render services efficiently. If payment

either for the case management services,

or to the providers of care had been

based in part on measurable outcome

targets, the projects’ personnel might

have monitored patient outcomes more

closely and focused efforts more

consistently on activities that would

increase the likelihood of improving

outcomes or reducing costs.

C. Issues To Address in Future Studies

The results of this evaluation indicate

that the following issues need to be

addressed in any future work related to

chronic illness case management:

• The importance of the involvement

of the client’s physicians;

• The need for focused interventions

based upon the etiology of the disease,

severity of the condition, co-morbid

conditions, psychosocial factors, and

other factors specific to the Medicare

population;

• The need for staff specifically

trained in case management; and

• The necessity for some incentives,

particularly financial incentives, to

control costs and improve outcomes. In

addition, we expect that future studies

will benefit from testing whether the

added costs of modifying and

intensifying case management

interventions to address limitations

identified by the prior demonstrations

can be implemented in a fiscally

responsible manner (both in terms of

costs for the case management services

and of the overall financing strategy).

Specifically, we recommend that future

studies clarify whether savings from

reduced medical costs would be

sufficient to cover the case management

costs in the Medicare fee-for-service

environment (where beneficiaries are

not bound to primary care physicians

for service approvals). The Mathematica

evaluation estimated that the costs

associated with providing the relatively

generic case management interventions

tested in the AdminaStar congestive

heart failure demonstration reached

about 14 percent of average client

medical expenditures. Based on the

most successful trial to date, if an

estimate of the possible savings from
Federal Register / Vol. 63, No. 112 /Thursday, June 11, 1998 / Notices 32017

focused congestive heart failure

interventions is about 23 percent of

client medical expenditures, then the

potential net savings could be up to 9

percent (23 percent minus 14 percent).

Whether the cost of more focused case

management interventions would be

less than the savings provided by the

interventions, and whether these

interventions could lead to measurable

improvement in beneficiary outcomes

are unknown.

Another consideration for future

studies is that HCFA’s experience with

case management demonstration

projects has established, as a key

element for success, the need for

creative incentive arrangements that

promote interdisciplinary collaboration

to affect appropriate provision and

substitution of services. In essence,

development of a financing strategy that

supports the goals of a Medicare fee-forservice case management demonstration

is as important to the potential success

of the project as is the design of the

delivery model and specific

interventions. However, given the

nature of the Medicare fee-for-service

program, HCFA recognizes that the

feasibility of implementing a case

management delivery model in the

program may be complicated.

Particularly challenging is that Medicare

fee-for-service beneficiaries are able to

seek services from any qualified

provider (there are no lock-in

provisions), the program does not offer

an oral medication benefit, and that

separate payment for non-face-to-face

interventions is typically not allowed.

Further, because Medicare fee-forservice providers receive payment for

discrete units of service, physicians and

other providers face direct incentives to

increase volume and intensity of their

services and to avoid the marginal costs

of providing services that are not

directly reimbursed.

In addition, there are other systemwide challenges to case management

implementation in a fee-for-service

environment. For example, a large

proportion of Medicare beneficiaries

have supplemental insurance that

typically covers co-payments and

deductibles, thereby leaving them little

incentive to use the health care delivery

system efficiently.

Despite these challenges, in the

Medicare fee-for-service program, and in

its payment demonstrations, there are

numerous examples of alternative

financing methodologies that have been

developed and implemented

successfully (such as the hospital

prospective payment system). However,

these experiences have indicated that

careful attention to the efficient pricing

of services, incentive and administrative

arrangements, and the interaction

between the provision of discrete

services and the broader service

delivery system is required. Therefore, a

successful demonstration project to

implement a case management delivery

model in the Medicare fee-for-service

program must efficiently provide and

oversee well-integrated case

management services, use a fiscally

responsible financing strategy that

involves appropriate, carefully crafted

incentive arrangements, and address the

challenges presented by the nature of

the fee-for-service program.

D. Demonstration Authority

Our authority to engage in this

proposed demonstration project is based

upon section 402 of the Social Security

Amendments of 1967, as amended (42

U.S.C. 1395b–1). Specifically, section

402(a)(1) of the Social Security

Amendments of 1967, as amended (42

U.S.C. 1395b–1), authorizes the

Secretary ‘‘either directly or through

grants to public or nonprofit private

agencies, institutions and organizations

or contracts with public or private

agencies, institutions, and

organizations, to develop and engage in

experiments and demonstration

projects’’ for one of eleven specified

purposes. Of these specific purposes, we

believe that the most appropriate

category for the demonstration

announced in this notice is section

402(a)(1)(B). Specifically, the purpose

given in section 402(a)(1)(B) is:

to determine whether payments for services

other than those for which payment may be

made under such programs (and which are

incidental to services for which payment may

be made under such programs) would, in the

judgement of the Secretary, result in more

economical provision and more effective

utilization of [Medicare covered services]

where such services are furnished by

organizations and institutions which have

the capability of providing—

(i) comprehensive health care services,

(ii) mental health care services (as defined

by section 2691(c) of [title 42],

(iii) ambulatory health care services

(including surgical services provided on an

outpatient basis), or

(iv) institutional services which may

substitute, at lower cost, for hospital care.

Thus, for consideration, proposals must

provide evidence that the applicant and

the proposed project fall within the

parameters of the demonstration

authority of section 402(a)(1)(B).

II. Provisions of This Notice

A. Purpose

This notice announces HCFA’s

solicitation for proposals for

demonstration projects that will use

existing, innovative case management

interventions to improve clinical

outcomes and quality of life for

beneficiaries diagnosed with congestive

heart failure or diabetes mellitus who

are in the Medicare fee-for-service

program under Parts A and B, and that

will provide savings to the Medicare

program at least sufficient to cover the

payment made for the case management

services. These savings are to result

from more efficient provision and

utilization of services and the

prevention of avoidable, costly medical

complications. Under the

demonstration, using a fiscally

responsible payment methodology that,

at a minimum, is budget neutral, HCFA

will make payment for the proposed

case management services. Thus, over

the course of the project, the aggregate

Medicare payment for the case

management services may be no greater

than the total expected program savings

from the case management

interventions.

Applicants must propose an allinclusive payment amount (for example,

per service, case rate, monthly fee, per

diem) for their proposed unit of case

management services. No separate

payment will be made for capital

investments, administrative,

implementation, operating, data

collection, research, evaluation, or any

other costs incurred by the

demonstration selectee(s) in the

provision of the proposed case

management services. The selectee(s)

will be required to cooperate in a formal

evaluation of the demonstration. No

additional funding will be provided for

this cooperation.

HCFA intends to award a maximum

of two proposed projects that best meet

the evaluation criteria, and plans to

operate the demonstration project(s) for

three years from implementation. The

selected projects(s) will test congestive

heart failure case management, diabetes

case management, or both.

B. Requirements for Submissions

1. Innovative Proposals

In this solicitation, HCFA seeks

innovative proposals that test whether

case management interventions improve

clinical outcomes and quality of life for

Medicare fee-for-service beneficiaries

with congestive heart failure or diabetes

mellitus, while providing savings to the

Medicare program at least sufficient to

cover the expenditures for these

services. HCFA is interested in case

management models that are

specifically targeted to the Medicare

population and that take into account
32018 Federal Register / Vol. 63, No. 112 /Thursday, June 11, 1998 / Notices

the beneficiaries’ relative health status,

age, and other factors, rather than the

application of generic clinical case

management delivery system models. Of

particular importance is the fact that

many Medicare beneficiaries have

multiple medical conditions. Case

management interventions that focus

exclusively on one condition may fail to

address the interaction of various

disease states. While a diagnosis of

congestive heart failure or diabetes

mellitus is a basic condition for

beneficiary participation in the

demonstration, HCFA is interested in

and will give preference to proposals

that focus on beneficiaries most likely to

benefit from case management

interventions that take patient comorbidities into account in the case

management interventions provided.

HCFA seeks to test existing case

management delivery protocols and

interventions that, at a minimum, have

been pilot tested, thus, preventing the

need for a long developmental time

frame. Proposals must build upon

lessons learned in HCFA’s previous case

management demonstrations and must

address specifically the following issues

in the context of the Medicare fee-forservice program under Parts A and B:

• Integration and involvement of the

client’s physicians in case management

activities;

• Well-defined clinical case

management delivery model protocols

that focus on congestive heart failure or

diabetes mellitus, and that demonstrate

an individualized approach to patient

education, counseling, and other

services;

• Focused training and experience of

the case management staff; and

• Budget neutral payment

methodology and incentive

arrangements that are administratively

feasible, and that support measurable

outcome targets, such as reduced

medical spending and improved

beneficiary clinical outcomes or health

status.

Proposals must show clearly that the

demonstration design incorporates the

four issues described above. In addition,

applicants must provide a scientific,

clinically-based rationale for their

design. We recommend that, at a

minimum, the applicant include a

detailed discussion of the following

project elements:

• Process for a beneficiary

participant’s identification, selection,

and discharge from the program;

• Definition and scope of services to

be provided;

• Process for ensuring adequate posthospital care and flow of patient

information from setting to setting;

• Process for payment allocation

across the proposed providers;

• Details of any risk or risk sharing

arrangements;

• Existing quality improvement

processes and study results;

• Description of the pertinent

research questions related to cost and

health outcomes;

• Proposed data elements that will be

collected to support the measurement of

these outcomes;

• Data system capabilities;

• Qualifications of staff and

management;

• Scope of the project, including the

number of beneficiaries, number and

types of providers, location, and period

of performance; and

• Implementation plan.

Proposals for models that rely on

medication management regimens must

address issues related to the cost of the

medications, beneficiaries’ ability to

afford the medications, and implications

for the applicant’s protocols, and other

pertinent information. In addition,

applicants must provide clear evidence

of actual net cost savings and outcomes

achieved during prior pilot testing or

implementation. Preference will be

given to proposals that include the

following:

• Evidence of cost effective clinical

case management delivery model

protocols, specific to the Medicare

population;

• Clinically-based approach to

identify patients with congestive heart

failure or diabetes mellitus who are

most likely to benefit from case

management;

• Use of focused interventions and

appropriateness screening, based upon

the etiology of the disease, severity of

the condition, and other relevant

factors; and

• Protocols that have been tested

specifically with a Medicare population

diagnosed with congestive heart failure

or diabetes mellitus.

2. Experimental Design and

Implementation Plan

Many of the design elements of the

proposed demonstration project will

depend on the protocol offered by the

applicant. At a minimum, for

consideration, the proposed

demonstration project must provide for

voluntary participation for Medicare

beneficiaries, a randomized

experimental design, and budget

neutrality (that is, no expected increase

in Medicare program costs).

Proposals that include existing case

management delivery protocols and

interventions that have never been

implemented on a Medicare population

must detail the modifications to the

protocols for application to the

Medicare fee-for-service population.

Proposals must include a detailed

implementation strategy and plan, and

provide evidence of how the plan

supports the project’s goals. In addition,

proposals must include evidence of the

feasibility of implementing the

proposed payment model in a fee-forservice environment.

3. Replication of Models

HCFA’s purpose in this solicitation is

to identify clinical case management

delivery system models for congestive

heart failure or diabetes mellitus that, if

evaluated as successful, could be

replicated throughout the Medicare feefor-service program under Parts A and

B. Accordingly, the protocols tested in

this demonstration cannot be

proprietary in nature to the extent that

the application of the intervention

beyond the demonstration will require

HCFA to contract only with the

demonstration selectee.

4. Eligible Organizations and General

Policy Considerations

HCFA is interested in proposals from

a variety of qualified organizations.

However, to be considered responsive,

the applicant must satisfy all of the

requirements described in sections I.D.,

II.A., and II.B. of this notice.

Organizations that believe they meet

these requirements may submit a letter

of intent to submit a complete proposal.

5. Letter of Intent

A signed letter of intent must be

received by the HCFA project officer as

indicated in the DATES and ADDRESSES

sections of this notice. The letter of

intent must indicate the applicant’s

intention to submit a completed

proposal for congestive heart failure

case management, diabetes case

management, or both. By submitting a

letter of intent, the applicant is not

obligated to submit a proposal. The

letter must be signed by a duly

authorized official and include the

applicant’s name, address, contact

person, business telephone number, and

all existing HCFA provider number(s)

and an Employer Identification Number

(EIN) for basic identification purposes.

For each timely submitted letter of

intent, the HCFA project officer, or

designee, will contact the specified

representative (contact person) to

discuss the application process.

Organizations that submit a timely letter

of intent may submit a completed

proposal and 10 copies (along with a

copy of the previously timely submitted

letter of intent) to the HCFA project
Federal Register / Vol. 63, No. 112 /Thursday, June 11, 1998 / Notices 32019

officer as indicated in the DATES and

ADDRESSES sections of this notice.

Applicants submitting proposals for

both congestive heart failure case

management and diabetes case

management should submit 2 completed

proposals (one for congestive heart

failure and one for diabetes) along with

10 copies of each proposal and a copy

of the previously timely submitted letter

of intent.

This notice is not covered by the

Paperwork Reduction Act of 1995 and

accordingly will not be reviewed by the

Office of Management and Budget.

Authority: Sections 402(a)(1) and

402(a)(1)(B) of the Social Security

Amendments of 1967, as amended (42 U.S.C.

1395b–1).

(Catalog of Federal Domestic Assistance

Program No. 93.779; Health Financing,

Demonstrations, and Experiments)

Dated: May 13, 1998.

Nancy-Ann Min DeParle,

Administrator, Health Care Financing

Administration.

[FR Doc. 98–15509 Filed 6–10–98; 8:45 am]

BILLING CODE 4120–01–P

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Health Care Financing Administration

[HCFA–1043–N]

Medicare Program; June 24 and 25,

1998, Meeting of the Competitive

Pricing Advisory Committee

AGENCY: Health Care Financing

Administration (HCFA), HHS.

ACTION: Notice of meeting.

SUMMARY: In accordance with section

10(a) of the Federal Advisory Committee

Act, this notice announces a meeting of

the Competitive Pricing Advisory

Committee. This meeting is open to the

public.

DATES: The meeting is scheduled for

June 24, 1998 from 9:00 a.m. until 5:30

p.m. and for June 25, 1998 from 9:00

a.m. until 1:00 p.m.

ADDRESSES: The meeting will be held at

the Bethesda Ramada Hotel and

Conference Center, 8400 Wisconsin

Avenue, Bethesda, Maryland 20814.

FOR FURTHER INFORMATION CONTACT: Lu

Zawistowich, Sc.D., Executive Director,

Competitive Pricing Advisory

Committee, Health Care Financing

Administration, 7500 Security

Boulevard C4–14–17, Baltimore,

Maryland 21244–1850, (410) 786–6451.

SUPPLEMENTARY INFORMATION: Section

4011 of the Balanced Budget Act of

1997, (BBA) (Pub. L. 105–33) requires

the Secretary of the Department of

Health and Human Services (the

Secretary) to establish a demonstration

project under which payments to

Medicare+Choice organizations in

designated areas are determined in

accordance with a competitive pricing

methodology. Section 4012 of the BBA

requires the Secretary to appoint a

Competitive Pricing Advisory

Committee (the CPAC). The CPAC will

meet periodically to make

recommendations to the Secretary

concerning the designation of areas for

inclusion in the project and appropriate

research design for implementing the

project.

The CPAC consists of 15 individuals

who are independent actuaries, experts

in competitive pricing and the

administration of the Federal Employees

Health Benefit Program, and

representatives of health plans, insurers,

employers, unions, and beneficiaries. In

accordance with section 4012(a)(5) of

the Balanced Budget Act, the CPAC

shall terminate on December 31, 2004.

The CPAC held its first meeting on

May 7, 1998. The CPAC members are:

James Cubbin, Executive Director,

General Motors Health Care Initiative;

Robert Berenson, M.D., Director, Center

for Health Plans and Providers, HCFA;

John Bertko, CEO and Senior Actuary,

PM-Squared Inc.; Dave Durenberger,

Senior Health Policy Fellow, University

of St. Thomas and Founder of Public

Policy Partners; Gary Goldstein, M.D.,

CEO, The Oschner Clinic; Samuel

Havens, Healthcare Consultant and

Chairman of Health Scope/United;

Margaret Jordan, Healthcare Consultant

and CEO, The Margaret Jordan Group;

Chip Kahn, CEO, The Health Insurance

Association of America; Cleve

Killingsworth, President, Health

Alliance Plan; Nancy Kichak, Director,

Office of Actuaries, Office of Personnel

Management; Len Nichols, Principal

Research Associate, The Urban Institute;

Robert Reischauer, Senior Fellow, The

Brookings Institute; John Rother,

Director, Legislation and Public Policy,

American Association of Retired

Persons; Andrew Stern, President,

Service Employees International Union,

AFL–CIO; and Jay Wolfson, Director,

The Florida Information Center,

University of South Florida. The

Chairperson is James Cubbin and the

Co-Chairperson is Robert Berenson,

M.D.

The agenda will include description

and discussion of private/public sector

experience with competitive pricing, the

status of quality of care measurements,

risk adjustment in the context of

competitive pricing, and the desired

criteria for demonstration site selection.

The CPAC will also discuss additional

information needed before selecting the

recommended demonstration design.

Individuals or organizations that wish

to make 5-minute oral presentations on

the agenda issues should contact the

Executive Director by 12 noon, June 11,

1998, to be scheduled. The number of

oral presentations may be limited by the

time available. A written copy of the

oral remarks should be submitted to the

Executive Director no later than 12

noon, June 18, 1998. Anyone who is not

scheduled to speak may submit written

comments to the Executive Director by

12:00 noon, June 18, 1998. The meeting

is open to the public, but attendance is

limited to the space available.

(Section 4012 of the Balanced Budget

Act of 1997, Pub. L. 105–33 (42 U.S.C.

1395w–23 note) and section 10(a) Pub.

L. 92–463 (5 U.S.C. App.2, section 10(a))

(Catalog of Federal Domestic Assistance

Program No. 93.773, Medicare—Hospital

Insurance; and Program No. 93.774,

Medicare—Supplementary Medical

Insurance Program)

Dated: June 4, 1998.

Nancy-Ann Min DeParle,

Administrator, Health Care Financing

Administration.

[FR Doc. 98–15600 Filed 6–8–98; 2:43 pm]

BILLING CODE 4120–01–P

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Office of Inspector General

Program Exclusions: May 1998

AGENCY: Office of Inspector General,

HHS.

ACTION: Notice of program exclusions.

During the month of May 1998, the

HHS Office of Inspector General

imposed exclusions in the cases set

forth below. When an exclusion is

imposed, no program payment is made

to anyone for any items or services

(other than an emergency item or

service not provided in a hospital

emergency room) furnished, ordered or

prescribed by an excluded party under

the Medicare, Medicaid, and all Federal

Health Care programs. In addition, no

program payment is made to any

business or facility, e.g., a hospital, that

submits bills for payment for items or

services provided by an excluded party.

Program beneficiaries remain free to

decide for themselves whether they will

continue to use the services of an

excluded party even though no program

payments will be made for items and

services provided by that excluded

party. The exclusions have national