Medicare Compliance & Reimbursement

To no one's surprise, House and Senate negotiators failed to produce compromise legislation revamping Medicare and adding a prescription drug benefit by Oct. 17, the deadline set a month ago by Republican Capitol Hill leaders. The date also passed without any formal announcement of the sort of broad "conceptual" agreement that conference vice-chair Sen. Charles Grassley (R-IA) and others had talked about earlier in the month. The negotiating is taking place mostly among Republicans, with Sens. Max Baucus (D-MT) and John Breaux (D-LA) the only Democrats involved. Senate Minority Leader Tom Daschle (D-SD) has complained about this and warned that it may make it harder to persuade the full Senate to approve a conference agreement. Among this week's developments: Movement Towards Income-Relating the Part B Premium. Breaux (D-LA) and others have indicated that the conference is moving towards charging higher-income beneficiaries a higher premium for Medicare Part B, which covers physician and hospital outpatient services. This approach appears in neither the Senate nor the House bill. The final Senate bill contains no income-relating provisions, but the upper chamber did come close to income-relating the Part B premium when it was debating S 1. An amendment by Democrat Dianne Feinstein (CA) and Republican conferee Don Nickles (OK) would have imposed higher premiums on wealthier beneficiaries, using a sliding scale starting at an income of $100,000 for individuals and $200,000 for couples. The amendment, which would have raised more than $40 billion over 10 years, garnered 59 ayes in a recorded vote, but the Senate ultimately defeated it in a subsequent voice vote after Sen. Edward Kennedy (D-MA) expressed intense opposition and threatened to hold up the legislation over the issue. The House bill does contain an income-relating provision, but it varies the benefit instead of the premium. Under HR 1, higher-income beneficiaries must pay more out-of-pocket for drugs before reaching the catastrophic threshold, after which Medicare pays for 100 percent of drug costs. The House, however, on Oct. 7 voted down a motion to instruct its conferees to push the principle of income relating in conference. Some moderates and liberals, like Kennedy, are opposed to any type of income relation in Medicare, worrying that it would undermine Medicare's political support among affluent Americans and expose it to the sorts of stigma that attach to welfare and other programs for poor Americans. However, other opponents of varying benefits by income, as the House does, are less troubled by income-related premiums. "I think most people who worry about support for the program would be opposed to having the benefits change by income, but they're going to split on whether or not there should be some income-relating on the premium," Marilyn Moon, director of [...]