Medicare Preferred Provider Organization and Competition Act

Medicare Preferred Provider Organization and Competition Act - Amends title XVIII (Medicare) of the Social Security Act to authorize the Secretary of Health and Human Services, through negotiations, to provide for the determination of payment rates for services by preferred provider organizations so long as the total amount of payments made under title XVIII pursuant to such rates does not exceed the lesser of: (1) 95 percent of the adjusted average per capita cost; or (2) the adjusted community rate plus the actuarial value of additional benefits provided.

Defines a "preferred provider organization" as an eligible health maintenance organization or competitive medical plan which has entered into an agreement with the Secretary under which: (1) the organization will provide directly or indirectly to individuals enrolled with the organization and entitled to benefits under part A (Hospital Insurance) of title XVIII, and enrolled under part B (Supplementary Medical Insurance) of title XVIII, all the services described in parts A and B and the organization will provide directly or indirectly to individuals enrolled with the organization and enrolled under part B (but not entitled to benefits under part A) all the services described in part B; (2) the organization may provide additional services or benefits if these services or benefits are specifically identified to the Secretary and prospective enrollees; (3) the organization agrees to meet requirements respecting access to care, quality of care, program administration, marketing and enrollment practices and materials, full and fair disclosure for enrollees, relationships with health care providers, financial viability, and protections to assure that enrollees will be held harmless in the case of the insolvency of an organization; and (4) the organization agrees to receive payment on a per capita basis.

Prohibits any State from preventing any group health plan payors: (1) from negotiating or entering into contracts for alternative rates of payments with, or determining alternative rates of payment for, providers of health care services and offering the benefit of such alternative rates to group health plan beneficiaries who select such providers; or (2) with the agreement of group policyholders and subject to the terms of any applicable collective bargaining agreement, from limiting payment under a policy to services secured by group health plan beneficiaries from providers of health care services charging alternative rates.