US Restrictions On HMOs Shelved Temporarily

In the USA, the Clinton Administration has temporarily shelved new rules that would have restricted health maintenance organizations from rewarding doctors who cut costs and control use of services by Medicare and Medicaid patients, according to a New York Times report.

The rules, mandated by a 1990 law, were issued at the end of March to protect consumers by limiting the use of these financial incentives. They were supposed to take effect on May 28, but the Clinton Administration has pulled them back for further review, without any notice to consumers. In a memorandum to HMOs dated May 28, the Administration said it realized the compliance date is unrealistic. The memo, the NYT noted, added that the government would not take any enforcement action before January 1, 1997.

Protests from HMOs forced the Department of Health and Human Services to suspend enforcement of the rule, said the NYT, which noted that the companies said the rules would force them to rewrite contracts with many doctors. The HMOs also accused the government of not understanding the importance of financial incentives in a fast-growing, highly competitive industry.