MEDICARE: Congress Bags Drug Benefit, Tackles BBA Cuts
House and Senate health leaders announced Wednesday that they have "abandoned efforts to produce legislation this year reforming the nation's Medicare system." The Washington Post reports that Congress will confine its efforts this fall to "steer[ing] more money" to health care providers, including nursing homes, hospital outpatient centers, home health care services, teaching hospitals and managed care plans, which have all "griped persistently" about 1997 Balanced Budget Act cuts (Goldstein, 10/14). The decision means that seniors will have to wait until at least next year for a prescription drug benefit, a prospect that does not please the White House. Chris Jennings, health policy coordinator for the Clinton administration, said Wednesday, "The president certainly would have preferred to do broader reforms in the Medicare program, including prescription drug benefits, this year. He is not giving up. He will continue to work with Congress to achieve that goal." However, congressional leaders claim that there is not "enough time" this year to implement such sweeping reforms. "One of our basic principles was 'no new starts. Pretty obviously prescription drugs are an important benefit that needs to be added in the context of overall reform of Medicare," said House Ways and Means subcommittee on health Chair Bill Thomas (R-CA), who unveiled his own Medicare "give-back" plan Wednesday (Pear, New York Times, 10/14).
Thomas' proposal, which has the backing of House Republican leaders, appears to be a frontrunner, along with a plan introduced Tuesday by Sens. William Roth (R-DE) and Daniel Patrick Moynihan (D-NY) (Post, 10/14). Thomas' plan calls for $9.4 billion in Medicare reimbursements to health care providers over five years, as well as an additional $5.6 billion "aimed at boosting payments" that would come from regulatory changes by the Clinton administration. Breaking down the allocation, Thomas said that various types of hospitals would receive in total about $8.2 billion, while skilled nursing facilities would get $1.8 billion and home health agencies would be bolstered by $1.3 billion in additional payments (McGinley, Wall Street Journal, 10/14). Although very similar to the Roth-Moynihan bill, "unlike the Senate bipartisan plan, House Democrats have yet to announce their support of Thomas' plan," reports CongressDaily. Thomas said that House leaders have assured him "money has been set aside in the on-budget surplus" to finance his restorations (Morrissey, 10/13). But some Democrats dispute the claim, contending that the surplus funds have already been "depleted by an array of other programs." Said Rep. Pete Stark (D-CA) ranking subcommittee member, "'I'm not opposed to [BBA] give-backs -- but they must be paid for' by reducing spending elsewhere in Medicare" (Journal, 10/14). Thomas' proposal is slated for a subcommittee vote Friday (Post, 10/14).
Health Care Industry Gives Plans Cold Shoulder
Most health care providers offered a "lukewarm" reception to the two restoration plans, the AP/Las Vegas Sun reports. A spokesperson for the American Hospital Association called it a "down payment," while Linda Keegan, vice president of the American Health Care Association, which represents 12,000 nursing homes, said the Roth-Moynihan proposal is "wholly inadequate." Those in the teaching hospital sector, however, favor the Senate plan, which would give them $2 billion, compared to only $300 million to $500 million over five years with the Thomas proposal. "It is clear that the hue and cry from teaching hospitals is being heard by the Senate Finance Committee," said Kenneth Raske, president of the Greater New York Hospital Association (New York Times, 10/14).