Budget Reconciliation Process Could Bring Changes to Medicare
The reconciliation process for the fiscal year 2006 federal budget could result in "numerous changes" to Medicare, according to a House Republican aide, who on Monday was speaking on background at a meeting sponsored by the Pharmaceutical Care Management Association, CQ Today reports. According to CQ Today, lawmakers to date have "discouraged speculation that Congress will tackle Medicare this year," beyond possibly reversing a scheduled 4.3% reduction in physician payments.
However, according to the aide, congressional budget negotiators could enact legislative changes to Medicare because of the need to reconcile the budget and make revisions to Medicare payment formulas, as well as the expiration of a moratorium on construction of new physician-owned specialty hospitals. The House FY 2006 budget resolution calls for the House Ways and Means Committee to find savings of $18.7 billion over five years from mandatory programs and the Energy and Commerce Committee to reduce spending in mandatory programs by $20 billion over five years.
According to the House aide, lawmakers seeking cuts "may use Medicare there; [they] may not." The Senate version of the budget had called for the Finance Committee to make $15 billion in cuts to mandatory programs, most of which were expected to come from Medicaid, but eventually was amended to avert such reductions.
President Bush has said he would veto any "attempt to limit the choices of our seniors and to take away their prescription drug coverage under Medicare," CQ Today reports. However, it is unclear whether Bush also would veto lawmaker's attempts to alter provisions in the new Medicare law unrelated to the drug benefit. According to CQ Today, Congress "could leave the drug benefit as it is, while altering other provisions in the 2003 law."
The House aide, for instance, indicated that a $10 billion fund included in the new Medicare law that aims to attract private health plans to offer new drug benefits might not be necessary, as many health plans "have flocked to the Medicare program," CQ Today reports. He also said that the Medicare Payment Advisory Commission has recommended reductions in payments to home health agencies, skilled nursing facilities and acute care hospitals, which could result in savings of $10 billion over five years.
Sen. Max Baucus (D-Mont.) said if the conference committee working to reconcile the two budget resolutions calls for reductions to Medicaid, that "automatically opens up Medicare" to similar cuts. He added, "I'd be surprised if senators didn't offer amendments changing Medicare." Regardless, lawmakers will not include changes to Medicare in the FY 2006 budget until the reconciliation process is completed, according to Christin Tinsworth Baker, a spokesperson for the House Ways and Means Committee (Reichard/Schuler, CQ Today, 4/18).
In related news, CMS on Monday "drew fire" from an unnamed House Republican aide, who criticized the agency for "failing to produce a detailed plan on how it intends to educate Medicare beneficiaries about" the new drug benefit. In remarks at the same PCMA meeting, the aide said that Congress allocated $1 billion to CMS to implement the new Medicare law, but the agency this year has spent only $600 million -- less than in fiscal year 2004 -- to educate beneficiaries about the law's provisions.
The Social Security Administration, which received $500 million to help implement the new law, has earmarked funding and released specific plans to promote the prescription drug benefit at 66,000 events at local senior centers and other locations, the aide said. The aide noted, "They have dedicated resources and a scheduled time frame. CMS does not." CMS needs to "get their house in order" and "step up to the plate," he added.
A CMS spokesperson said Rep. Ralph Regula (R-Ohio) and Sen. George Voinovich (R-Ohio) have praised the agency's education efforts, adding that CMS is enacting a "national strategy executed locally" that includes personal counseling of beneficiaries through state and local agencies. "There has been a lot of information shared with Congress (on the campaign) and there will be in the months ahead," the aide said, adding, "There may be some folks who have not gotten the information yet. ... When people get the facts, they're much more likely to enroll."
The House aide also criticized CMS for permitting health plans that offer the new prescription drug benefit to cover just one medication in a therapeutic category if there are only two products in the category. "CMS in this instance has sidestepped the clear intent of the statute," the aide said.
He also criticized an interpretation of the new Medicare law that prevents beneficiaries from appealing the inclusion of a medication in a higher tier of copayments. In addition, the aide said that CMS regulations on electronic prescribing should pre-empt state laws for both Medicare beneficiaries and commercial health plan members because pharmacy benefit managers use the same systems for both public and private sector beneficiaries (CQ HealthBeat, 4/18).