Medicare Compliance & Reimbursement

Senate Majority Leader Bill Frist (R-TN) and House Speaker Dennis Hastert (R-IL) shook up the stalled Medicare talks Nov. 12 with a compromise proposal on premium support, the direct competition between traditional Medicare and private plans included in the House's bill but not the Senate's. Premium support has been foremost among many thorny issues that have bedeviled efforts by negotiators to agree on a proposal to overhaul Medicare and add a drug benefit. The leadership competition proposal has garnered support from important quarters such as Democratic conferees John Breaux (LA) and Max Baucus (MT). And in a Nov. 13 statement, AARP head William Novelli said, "The idea of a premium support demonstration (or a test of comparative costs) which is limited in duration and location, with strict standards for accountability and low-income beneficiary protections, could strike a balance on the most intensely debated issue in the conference." Indeed, Novelli's receptivity to Frist and Hastert led Senate Democratic leader Tom Daschle (SD) to charge that AARP was "caving in" to Republicans. But the Frist-Hastert plan has also engendered criticism from those who think it goes too far, including key Senate Democrats like Edward Kennedy (MA) and several Senate Republicans. Criticism has come, too, from conservative House Republicans, including conference chair Rep. Bill Thomas (CA), who think it does not go far enough. The House bill would phase in premium support as a permanent feature beginning in 2010. Frist and Hastert have proposed instead a three-year premium-support demonstration program, to run from 2008 to 2010, in four large metropolitan statistical areas, each with at least 30-percent managed care penetration among Medicare beneficiaries, and in one region with at least 20-percent penetration. If areas could not be found to meet these criteria, the plan allows for alternative geographic mixes. After 2010, the Department of Health and Human Services could extend the demo for up to three more years. After that, new legislation would be needed to extend the demo or to make it permanent. The so-called "core group" of conferees - all Republicans plus Baucus and Breaux - met on Nov. 13 without reaching agreement. Thomas and conference vice-chair Sen. Chuck Grassley (IA) are reportedly planning to recommend changes to the plan, which Frist and Hastert will consider before proposing a final package. The GOP leaders aim for a formal conference agreement early next week, with floor action in the House and Senate before the adjournment target date of Nov. 21.

Tough Going Expected In Both Chambers  The task of coming up with a viable compromise will be extremely difficult. On the one hand, many conservatives, nervous about the unfunded entitlement expansion represented by a broad new benefit, believe that premium support is necessary to [...]