House Republicans, President Bush Consider Malpractice Damage Award Cap in Medicare Reform Bill
The Bush administration appears to be siding with House Republicans who oppose including a scheduled Medicare provider payment cut in upcoming Medicare reform legislation, but to "placate physicians" House Republicans are "seriously considering" including a malpractice damage award cap in the Medicare reform bill instead, CongressDaily/AM reports (Rovner, CongressDaily/AM, 5/9). In March, the House passed a bill (HR 5) that would cap noneconomic damages in malpractice lawsuits at $250,000 and would allow punitive damages of $250,000 or twice the amount of economic damages, whichever is higher. The legislation would cover lawsuits filed against physicians, HMOs, pharmaceutical companies and medical device companies. The bill also would allow state governments to increase or decrease the cap; the legislation would not cap economic damages, which include medical costs and lost wages. The Senate has yet to pass any malpractice damage award cap legislation (California Healthline, 4/22). Attaching a malpractice damage award cap to Medicare reform legislation would "assuage doctors" by giving them what some predict would be "some relief from skyrocketing medical malpractice premiums," CongressDaily/AM reports. In addition, attaching the malpractice cap also would force the Senate to address the issue and could generate savings that could be reallocated in the Medicare bill, according to CongressDaily/AM. In March, the Congressional Budget Office projected that the malpractice bill could save Medicare, Medicaid and the Federal Employee Health Benefits Program $14.9 billion over 10 years.
In a letter sent to House Ways and Means Committee Chair Bill Thomas (R-Calif.), CMS Administrator Tom Scully said he agrees with the Medicare Payment Advisory Commission's finding that Medicare payments are "adequate to cover the costs of efficient providers." Scully said MedPAC's findings "have a great deal of merit," adding that Congress might want to consider cutting some provider payments to pay for other aspects of the Medicare bill. He added that congressional action and administrative changes Scully made have given doctors a $65 billion, 10-year increase in payments. Scully also said that he agreed with MedPAC's recommendation that Medicare funding for rural hospitals be increased. "We look forward to working with the committee to carefully evaluate how savings from provider payment adjustments could support Medicare modernization. I want to emphasize that enacting Medicare modernization is the highest priority for this year," Scully wrote. According to CongressDaily/AM, Scully's letter likely will displease doctors and the National Association of Urban Hospitals, which recently released a study showing urban hospitals are in as much if not more financial distress as rural hospitals (CongressDaily/AM, 5/9).
The following are summaries of opinion pieces on Medicare reform and prescription drug costs:
Los Angeles Times: Covering "older, cheaper" prescription drugs rather than their newer, more expensive counterparts -- a new Medicare coverage policy for some medicines recently announced by CMS Administrator Tom Scully -- is a good way to begin addressing rising prescription drug costs, a Los Angeles Times editorial states. Medicare currently only covers some inpatient medications, and if the program is altered to cover outpatient medications, drug companies are "worried" that the same coverage determination would be employed and they could lose billions of dollars, the editorial states. "Ideally," the FDA should "tighten standards" by requiring drug makers to prove a new treatment's efficacy versus already existing drugs for the same ailment, and the agency should encourage states and other large purchasers to negotiate better prices, the editorial states. However, "barring systemic change," Medicare's system of determining which inpatient drugs to cover is a "practical start" to addressing rising drug costs, the editorial concludes (Los Angeles Times, 5/9).
- Washington Times: Although "[b]road" Medicare reforms are necessary, the Bush administration and Congress are unlikely to reach an agreement on how to do so before the 2004 election cycle begins next spring, and the "best way" to move forward would be to pass a prescription drug benefit that includes "some elements of larger reform," a Washington Times editorial states. The editorial says that administration advisers "clearly see the political benefit of a bipartisan, bicameral bill that will improve the quality and cost of prescription drug coverage for America's 40 million seniors -- even if the reform is not as far-reaching as Mr. Bush would like." Such a bill would "[m]ost likely" include a drug-discount card, a credit for seniors who stay in the fee-for-service program and possibly "some small elements" of broader reform. The editorial states that if President Bush signs such a package, it would be a "political win" for the Republicans and would help improve health care for seniors. The Times concludes, "While [it would] be a substantial accomplishment, it alone does not assure ... the long-term viability of the Medicare program. That would be an urgent legislative item for the president's second term" (Washington Times, 5/9).