MEDICARE: Clinton Rails Against Fraud, Waste
In a press conference yesterday to announce new initiatives to fight Medicare waste and fraud, President Clinton vowed to take action against "private-sector health care contractors ... responsible for fighting fraud and abuse [who] too often are not living up to their responsibilities." He entreated legislators to act, saying, "By passing these common-sense measures, Congress can do more than help save taxpayers' money. It can demonstrate a bipartisan desire to preserve and strengthen Medicare for the future. ... Every year, Medicare is cheated out of billions of dollars, money that translates into higher taxes on working Americans [and] higher copayments in premiums for elderly Medicare recipients" (White House release, 12/7). Click here to read a detailed account of Clinton's plan to save $2.1 billion by cracking down on fraud and eliminating excessive payments for prescription drugs. Click here to read a transcript of Clinton's statement.
Senate Select Committee on Aging Chair Charles Grassley (R-IA) lauded Clinton's efforts, especially since the Y2K computer glitch increases "the opportunity for foul play," He said, "Those of us disturbed by fraud have our work cut out for us. If computers fail, paper records will increase the likelihood of fraud. Vigilance now will reward us later." Margaret Dixon, former president of the American Association of Retired Persons, called Clinton's plan "a critical, essential step." She said, "The idea that fraud is rampant and little is being done about it is very much alive in the public's mind. They are totally unaware of anything that is being done" (Ross, AP/Philadelphia Inquirer, 12/8).
Let's Talk Business
Clinton's proposal to eliminate excessive prescription drug reimbursements would bring Medicare in line with the Veteran's Administration's policy. The Washington Times reports that a "similar White House plan failed last year," with Congress instead "limiting Medicare drug payments to 95% of an industry-developed 'wholesale price list.'" However, industry sources "liken the list to a new-car sticker price that no sensible buyer would pay" (Goldreich, 12/8). Bloomberg News/Los Angeles Times reports that despite Clinton specifically targeting overpayments for the anti-anemia drug Epogen, its manufacturer's stock rose $1.56 to $80.31 in NASDAQ trading yesterday. Amgen Inc. derived roughly half of its 1997 revenue from Epogen, "much of which was paid by" Medicare. Prudential Securities analyst Barbara Dreyfuss said, "It's 50-50" whether Congress will take up Clinton's recommendation on Medicare drug reimbursements. She predicted that if "legislators don't act, the Clinton administration will probably turn up the pressure by threatening to bypass Congress and carry out the cut through regulations" (12/8).