Medicare Compliance & Reimbursement

Republican leaders on Capitol Hill have set a new deadline of Oct. 17 for congressional negotiators to agree on a Medicare prescription drug benefit and a reorientation of the program towards private plans. However, as comments by conference committee chair Bill Thomas (R-CA) and others make clear, the deadline is not hard and fast, and may indeed be too hard and too fast. Senate Majority Leader Bill Frist (R-TN) and House Speaker Dennis Hastert (R-IL) announced the deadline following a Sept. 24 meeting with conferees. But Thomas told reporters he himself has not set a deadline, and other conferees have made no secret of their concern that the large remaining differences may not be bridgeable so quickly. For example, conference vice chair Sen. Charles Grassley (R-IA) told Iowa reporters, "I'm not sure we're going to get it done by Oct. 17," according to the Des Moines Register. Many observers have said that comprehensive Medicare revamping is possible only with much more intensive personal involvement by President Bush. The president tried to provide some of that involvement when he met Sept. 25 with conferees, exhorting them to produce a bill. But after the meeting both Republicans and Democrats said Bush spoke in generalities and did not offer details of what compromise legislation should look like, according to CQ Today. Meanwhile, many critics argue, often but not exclusively from the right, that both the House and Senate bills are too expensive and would prompt businesses to drop retiree coverage. At a Sept. 24 hearing of his Government Reform Subcommittee on Human Rights and Wellness, Rep. Dan Burton (R-IN) promoted a scaled-back benefit aimed at low-income beneficiaries. The proposal, which he called a work in progress, includes a "hard cap" designed to keep costs under $200 billion over ten years by allowing the Health and Human Services Secretary to vary benefit parameters if costs run too high. Burton's draft would offer a catastrophic drug benefit, kicking in after $3,000 of total drug costs, to all beneficiaries with incomes under 250 percent of the federal poverty level and no other drug coverage. These individuals would also get a combination discount/debit drug card, loaded with a government contribution varying by income: $2,500 for beneficiaries under federal poverty level, $600 for those between 175 and 250 percent of FPL, with intermediate contributions in between. The bill would also allow the HHS Secretary to negotiate prices using seniors' amalgamated buying power as leverage. Burton said the Department of Veterans' Affairs uses this strategy successfully, although he complained that the VA refused to tell him exactly what prices it gets. Not everyone agrees this would lower costs, however. On Sept. 8, for instance, a GOP staffer vigorously defended [...]