Pork

I've been doing a bit of research on what were called "Intermediary Carriers." They are now called MAC's, or Medicare Administrative Contractors. They will still be the same insurance companies that actually administer medicare. That is to say, they process claims and then bill the government.

My understanding is that claims are currently processed electronically. The hospital or physician has to convert paper to digital data (at their own expense) which goes into the insurance company's computer and the computer cuts the check. At the CMS website recently, MAC's were announced for five states at a cost of 1.4 billion for five companies for five years.
For what? Software upgrades?

And, because of the Medicare Modernization Act (HR 1-56, 2003) section 911 (page 313), the Secretary of HHS may renew these contracts "...without regard to section 5 of Title 41 of the United States Code or any other law requiring competition if the Medicare Administrative Contractor has met or exceeded the performance requirements applicable with respect to the contract and contractor."

So, HHS only has to put these contracts out to bid once every five years as long as, in the secretary's estimation, they're doing a good job.

And by medicare regulations, the contractors are covered for .."bonuses, and incentive compensation payments to directors, officers and employees."

This stipulation, however, is my favorite:

"It shall include pay for time not worked, i.e., rest periods, lunch periods, jury and voting allowances."

They also pay for the "deprecication, or the cost of maintenance and repairs" of electronic data processing equipment. So not only do the companies get to have their computers do the work, but also get to bill the government for the equipment to do it. And for all those hours they didn't work.

So why did the insurance companies so rapidly get on board with the Health Care Reform Mr. Obama is pushing? I suspect it's because they want to buy Pork futures.