Medicare Compliance & Reimbursement

In the Senate, there is still a ways to go before a final product. However, it's looking more and more like the bill authored by Finance chair Charles Grassley (R-IA) and senior panel Democrat Max Baucus (MT), S. 1, will be approved with significant Democratic support. On June 18, for example, the Senate turned back an amendment by Sen. Debbie Stabenow (D-MI) that would have offered every FFS beneficiary the option of obtaining drug coverage through a government-run plan, no matter how many private entities in particular geographic areas were willing to offer drug-only plans on the limited risk-bearing basis envisioned in the Grassley-Baucus bill. The Senate voted 58 to 37 to reject Stabenow's amendment. Republicans unanimously voted no and were joined by independent James Jeffords (VT) and Democrats Max Baucus (MT), John Breaux (LA), Thomas Carper (DE), Mary Landrieu (LA), Zell Miller (GA), and Ben Nelson (NB). Still, Senate passage is not a sure thing. According to CQ Today, 27 GOP Senators sent President Bush a letter urging a narrower, less expensive approach that would focus on providing drugs to low-income seniors and those with high medication expenses. Many conservatives are not happy about what they see as the lack of fundamental reforms in S. 1. For instance, Sen. Jon Kyl (R-AZ) has argued that the bill stacks the deck against PPOs by tying what the government will pay them to FFS costs. Kyl and others would like the government to simply take the lowest-bidding PPOs in a given area, regardless of cost. By an overwhelming 94-1 vote, the Senate amended the Medicare bill with legislation designed to speed the market entry of generic drugs. The bipartisan compromise would revise the landmark legislation authored by Sens. Orrin Hatch (R-UT) and Rep. Henry Waxman (D-CA) that created the modern generic drug industry. One reason for the bipartisan enthusiasm for the generic drug bill: Sponsors estimate it could save about $20 billion over ten years that would be available for use in sweetening the underlying Medicare bill. Last year, however, the House refused to even take up a similar Senate-passed measure, so the provision's fate in a House-Senate conference would be unclear.