MEDICARE: Giveback Details Revealed, Veto Threat Remains
Republican congressional leaders yesterday said they had reached agreement on their plan to return $28 billion in Medicare funding over the next five years to hospitals, HMOs and other providers, but the package still faces a veto threat from President Clinton, who is concerned that too much of the money goes to Medicare HMOs, the New York Times reports. GOP lawmakers and aides offered the following details about the package:
- Medicare HMOs would receive an additional $10.2 billion over five years, including $6.2 billion in "basic Medicare payments" and $4 billion to "reflect the cost of new benefits and the higher rates for doctors, hospitals and nursing homes";
- Hospitals would receive an additional $8.4 billion over five years, including a "full adjustment in 2001 to cover inflation in the cost of goods and services" (Pear, New York Times, 10/20). However, hospitals did not receive a full inflation update for the second year -- the provision "they most wanted" (Rovner, CongressDaily/A.M., 10/20);
- Nursing homes would receive an additional $1.6 billion in Medicare payments, intended to help them pay higher wages to nursing staff members, although such spending would not be required;
- Home health agencies would get an additional $1.3 billion over five years, providing a one-year delay in a 15% funding cut scheduled to take effect next October.
Veto Threat 'Still Operative'
GOP lawmakers, who noted they had heard from "hundreds of constituents" who had been dropped by Medicare HMOs, said the HMO payment increases were necessary to prevent further pullouts from the Medicare+Choice program (New York Times, 10/20). House Ways and Means health subcommittee Chair Bill Thomas (R-Calif.) added that HMOs received only 11% of the funds in last year's Balanced Budget Refinement Act (H.R. 3075), compared to 45% for hospitals, saying, "You have to look at them together" (CongressDaily/A.M., 10/20). Thomas also noted that the bill provides $5.7 billion in new benefits, including new preventive care services. But Chris Jennings, White House health policy coordinator, said the veto threat is "still operative." The New York Times reports that in pushing the legislation, Republicans have "virtually challenged [Clinton] to carry out that threat" and "appear to have set themselves up for a high-stakes political confrontation with the White House just three weeks before Election Day" (New York Times, 10/20). Jennings added that as a condition of receiving the increased funding, HMOs should have to agree to remain in the program for at least three years. But American Association of Health Plans President Karen Ignagni "immediately rejected" that suggestion, saying, "When you've had a situation where the program has been underfunded and overregulated, to then say we should be talking about a lock-in is just not possible" (Rubin, Los Angeles Times, 10/20).