Sens. Baucus, Grassley Reach Agreement on Medicare ‘Giveback’ Package

Senate Finance Committee Chair Max Baucus (D-Mont.) and committee ranking member Sen. Charles Grassley (R-Iowa) have reached an agreement on a Medicare "giveback" package, CongressDaily reports. According to an outline, the $41 billion, 10-year plan includes "smaller-than-planned" cuts for hospitals and increases in payments for rural physicians, hospitals and home health agencies. Medicare+Choice plans would receive a "temporary boost" in payments of 4% in 2003 and 3% in 2004. In addition, a pilot program that uses competitive bidding for durable medical equipment would be expanded nationwide under the plan. The package also includes industry-sought changes to nursing home payments (Rovner, CongressDaily, 9/26). The nursing home industry has been lobbying Congress to continue $1.7 billion in temporary Medicare funding that is scheduled to expire Monday. Although CMS has said the industry needs to be "weaned" from the extra funds because the "payments cannot be permanently justified," the industry said lay offs and bankruptcies will occur without the funding (Sergent, Scripps Howard/Bradenton Herald, 9/26). Funds for Medicaid and state CHIP programs also are included in the package (CongressDaily, 9/26). For beneficiaries, the plan would allow Medicare to cover immunosuppressive drugs for organ transplants and renew a five-year program that helps low-income seniors pay their Medicare premiums (Rovner/Fulton, CongressDaily/AM, 9/27). The plan also includes a two-year delay of payment caps for physical and occupational therapy and expands coverage of cholesterol and lipid level tests (CongressDaily, 9/26). In a statement, Baucus and Grassley said the bill is "a critical piece of legislation that, across the spectrum of care, contains vital payment adjustments and beneficiary enhancements for Medicare services."

Despite the new agreement, it remains uncertain whether the package will clear the Finance Committee, much less the entire Senate, CongressDaily/AM reports. For example, Sen. John Rockefeller (D-W.Va.), a member of the committee, is concerned the Medicaid provisions in the package will "weaken" support for a Medicaid block-grant measure approved by the Senate earlier this year (CongressDaily/AM, 9/27). The Medicaid provision, included in a generic drug bill (S 812) the Senate approved this summer, would give states $9 billion to help cover Medicaid costs (California Healthline, 8/1). Further complicating the future of the giveback package, Finance Committee members John Breaux (D-La.) and Olympia Snowe (R-Maine) have "vowed" not to allow any giveback plan to pass the committee unless it includes a Medicare prescription drug benefit. The lack of a prescription drug benefit also may impact the bill's chances in the House. House Energy and Commerce member Richard Burr (R-N.C.) said, "I don't expect us to roll over and say, 'Let's just do the giveback piece.' We need to make some more substantive changes (to Medicare and Medicaid) and this might give us the vehicle" (CongressDaily/AM, 9/27). However, Finance Committee spokesperson Michael Siegel said, "No one has given up on the issue of prescription drugs. In the meantime, we do feel very good about this giveback package" (AP/Richmond Times-Dispatch, 9/27).