HHS: Carriers Can Team Up

Federal officials say single-state health insurers can form alliances to compete for Medicare managed care and Medicare drug benefit plan contracts.[@@]

The U.S. Department of Health and Human Services has issued a pair of final rules stating that several health plans can unite to form a “joint enterprise” that can enter into contracts to offer a single prescription drug plan or a single Medicare Advantage managed care plan in a multistate region.

Several health plans have asked about the possibility of forming regional alliances, according to the rulings, which were issued by Mark McClellan, administrator for the Centers for Medicare & Medicaid Services, and HHS Secretary Michael Leavitt.

“The statute generally requires that the [contracting] ?entity’ be licensed by the state as a risk-bearing entity where it offers benefits,” officials write in a preamble to the rulings, which appear today in the Federal Register.