June 1996 AAOS Report

Academy may ask court to bar HCFA's use of 'centers of excellence' term

The Board of Directors, meeting in Rosemont, Ill., May 17-18, 1996, authorized the preparation of legal documents for a possible request for a court injunction to prevent the Health Care Financing Administration (HCFA) from using the term "centers of excellence" for hospitals participating in a proposed demonstration project on total hip replacement. HCFA and participating hospitals would negotiate a package price for a procedure, combining physician and hospital payments for a single episode of care; the hospital would distribute payments to all providers of the care. The Academy does not object to HCFA exploring alternative payment methods to reduce the cost of health care. However, the Academy objects to HCFA's designation of the participating hospitals as "centers of excellence" and to encouraging the hospitals to use the term as a marketing device.

William W. Tipton Jr., MD, Academy executive vice president, stated in a letter to Donna Shalala, Secretary of Department of Health and Human Services, that "there is nothing to suggest that HCFA has gathered any data to determine what constitutes a 'center of excellence' as it relates to joint replacement surgery." Similar comments were made to Bruce Vladek, PhD, Administrator, HCFA; and Alice M. Rivlin, Director, Office of Management and Budget. Michael H. Graham, MD, chairman of the Council on Health Policy and Practice, which recommended preparing for legal action against HCFA, also reported that the council would convene a consensus panel in June to determine what constitutes the designation of a "center of excellence."

HCFA distributed requests for proposals for participation in the program in 10 states in the west and midwest; the deadline for filing was May 10. Up to 100 hospitals may eventually be selected to participate in the pilot study.

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