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Sep 26, 2000

CONTACT: Jamie Court - 310-392-0522 x327

Gore Partially Adopts Consumer Group Recommendation:

Punitive Measures To Be Taken Against Medicare HMOs That Cherry Pick
Yesterday, Vice President Al Gore announced he would first warn, then ban Medicare HMOs that only participate in the most profitable Medicare markets.

The Foundation for Taxpayer and Consumer Rights (FTCR) wrote the Clinton Administration in July asking for a policy that an HMO must abandon all Medicare contracts if the company wants to drop the less profitable markets.

Medicare HMOs began dropping out of a significant number of counties where they felt their reimbursements were not high enough or their costs were too high. The industry announced it will abandon coverage for more than one million Medicare patients across the nation by the end of this year.

Taxpayers should not subsidize Medicare HMOs that selectively choose those markets in which they want to participate," wrote FTCR advocates Jamie Court and Andrew Pontious on July 18th. " If an HMO commits to the delivery of health care for Medicare recipients, then the HMO should serve all Medicare recipients it is able to serve."

"The Administration is finally recognizing that it has significant leverage over this industry through taxpayer funds," said Jamie Court, executive director of FTCR. "Sticks work far better with the HMO industry than carrots, and this Administration should start to use more and bigger sticks."

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