Medicare Conferees Reach Agreement on Pharmacy Discount Cards
Members of the conference committee charged with reconciling the House and Senate Medicare bills (HR 1 and S 1) yesterday reached agreement on a proposal to provide Medicare beneficiaries with drug discount cards in the two years before a Medicare prescription drug benefit would take effect, the New York Times reports. Under the proposal, similar to the one endorsed by President Bush in July 2001, pharmacy benefit managers, health insurers, drug store chains and other entities could charge Medicare beneficiaries up to $30 per year for access to a card that could offer prescription drug discounts between 15% and 25% below retail prices, according to lawmakers' estimates. The proposal does not state a set amount for the discounts (Pear, New York Times, 9/10). The cards would become available within six months after passage of a final Medicare bill and would expire when Medicare began its drug coverage in 2006 (Broder, Washington Post, 9/10).
Companies offering the cards would be required to meet certain standards, including guaranteed access to certain pharmacies, in order to receive a "Medicare stamp of approval," the Los Angeles Times reports (Kemper, Los Angeles Times, 9/10). Companies issuing the cards would negotiate discounts with drug manufacturers and would be allowed to establish a formulary of selected drugs on which the discounts apply. The program would not require companies that issue the cards to pass on the entirety of the discount negotiated, or even a set percentage of such discounts, to beneficiaries, the AP/Las Vegas Sun reports (Espo, AP/Las Vegas Sun, 9/9). Beneficiaries would have a choice of at least two Medicare-approved discount cards, but would be permitted to use only one card at a time. The cards would be available to all Medicare beneficiaries, except the six million who are dually eligible for Medicaid. Low-income Medicare beneficiaries who do not qualify for Medicaid would receive up to $600 per year in subsidies, which could be used along with the card to purchase discounted prescription drugs. Individual beneficiaries with incomes of up to 100% of the federal poverty level, or $8,980 per year, would be required to pay out-of-pocket for 5% of the discounted price of each drug; individual beneficiaries with annual incomes of between 100% and 135% of FPL, or $8,980 to $12,123 per year, would pay 10% for each medication (New York Times, 9/10). The federal government would also pay the enrollment fees of low-income beneficiaries (Los Angeles Times, 9/10). Beneficiaries with incomes above 135% of FPL would not receive any additional assistance beyond the discounts (New York Times, 9/10).
The agreement on the drug discount cards marked the "first important fruits of compromise" in the Medicare negotiations, the AP/Sun reports. "So far we have seen a willingness to work together in a bipartisan, bicameral way. I think this spirit can continue," House Ways and Means Committee Chair Bill Thomas (R-Calif.), chair of the conference committee, said (AP/Las Vegas Sun, 9/9). Thomas added that he hoped there would also be bipartisan cooperation on "larger, more contentious issues," the New York Times reports (New York Times, 9/10). According to the Wall Street Journal, Thomas said negotiators could meet again as early as next week to continue attempts to reconcile the House and Senate Medicare bills (Lueck, Wall Street Journal, 9/10). Meanwhile, some lawmakers said the discount cards carried "political significance" because they would provide a tangible benefit to Medicare beneficiaries before the 2004 elections, the New York Times reports. In addition, lawmakers said they might authorize the discount cards beyond 2005 if Congress does not pass a Medicare prescription drug benefit (New York Times, 9/10).
Thomas yesterday said that he is interested only in "finding the minimum number of votes" in the conference committee to send a final bill to the House and Senate, according to the Post. Thomas' comment furthered speculation among some Democrats that House Republicans are pursuing a "51-vote strategy," under which they would try to create a bill that would pass the House with little Democratic support and then leave Senate Democrats with the "unpalatable choice between concurring or threatening a filibuster," the Post reports (Washington Post, 9/10). Some aides to Republicans have "spoken openly" over the past few days about such a strategy, the AP/Sun reports (AP/Las Vegas Sun, 9/9). Sen. Max Baucus (D-Mont.), who played a key role in crafting the bipartisan agreement that allowed the bill to pass in the Senate, said that plan could jeopardize final passage of a Medicare compromise (Washington Post, 9/10). Noting that Senate rules require 60 votes to end debate on a measure, Baucus said, "If I feel [that Republicans are trying to pursue the 51-vote strategy], I'm going to have to reconsider my position on this legislation. I'd rather have a good bill. But no bill is better than a bad bill," Baucus said (Los Angeles Times, 9/10). Senate Finance Committee Chair Charles Grassley (R-Iowa), another author of the Senate bipartisan compromise, said he agreed with Baucus (Washington Post, 9/10).
Negotiators yesterday also reached agreements on three other provisions:
- The committee voted to approve a provision that would increase Medicare payments to certain rural hospitals with fewer than 26 beds, a "top concer[n]" of Grassley, the New York Times reports. Under the provision, such facilities, known as critical-access hospitals, would be reimbursed for 101% of their costs. In addition, more hospitals would qualify for such assistance (New York Times, 9/10). The provision would apply to about 800 facilities, mostly in rural areas, the Los Angeles Times reports.
- The committee also approved a provision that would expand Medicare coverage to include certain screening tests for diabetes and heart disease (Los Angeles Times, 9/10).
- Negotiators also voted to approve a provision that would provide $1.2 billion over two years to increase Medicare payments for more than 100 treatments administered on an outpatient basis in hospitals, the Wall Street Journal reports. The provision would set a minimum payment for certain hospital outpatient drugs in 2004 and 2005 and would mandate that Medicare pay the full cost of drugs used to treat rare diseases. According to the Journal, the provision represents a victory for the biotechnology industry, which had told lawmakers that reimbursements for many of its products -- especially those that are "high-tech and expensive" -- were set too low and discouraged hospitals from prescribing them (Wall Street Journal, 9/10).