Thompson Backs Bush Drug Plan at Confirmation Hearing

Senate Finance Committee members yesterday urged HHS Secretary-designate and Wisconsin Gov. Tommy Thompson (R) to push for large-scale Medicare reform and a universal prescription drug benefit for seniors, with several senators cautioning him that President-elect Bush's short term drug plan will not be well-received. At the first of Thompson's two confirmation hearings, Democrats and Republicans alike praised Thompson for his "bold" and "innovative" work in his 14 years as the governor of Wisconsin and showed uniform support for his confirmation. Citing such Wisconsin insurance programs as BadgerCare and Family Care, Sen. Charles Grassley (R-Iowa) said Thompson was "not bound to old, tired approaches" and offered "creative solutions to tough problems." Thompson received no questions relating to his positions on abortion, stem cell research or his ties to tobacco companies. Instead, senators focused mainly on improving Medicare and Medicaid, providing prescription coverage and mitigating reimbursement rate disparities among providers (John Kastellec, California Healthline, 11/19). Dow Jones Business News reports that "[p]otential fireworks" involving abortion and stem cell research are "more likely" when Thompson testifies today before the Senate Health, Education, Labor and Pensions Committee (Dow Jones Business News, 1/18).

Many questions at yesterday's hearing centered around Bush's prescription drug proposal to provide block grants to states to provide immediate assistance to low-income seniors (California Healthline, 1/19). Under the "Immediate Helping Hand" plan, states would receive $48 billion over four years to implement the prescription drug benefit, which would cover all prescription drug costs for seniors earning up to 135% of the poverty level and part of the costs for those earning more (California Healthline, 9/5/2000). Yesterday, several senators from both sides of the aisle asked Thompson to reconsider the proposal, criticizing it both on its merits and on the possibility that it could preclude broader Medicare reform. Sen. John Breaux (D-La.) called the plan "ill-advised and ill-conceived" because many states, including his, could not afford the matching funds needed to implement the program and because "people will think it's a welfare program." He added that enacting the proposal would take as long as passing a full-scale Medicare reform complete with a prescription drug benefit for all seniors. Sen. Max Baucus (D-Mont.) who said the proposal would not be favorably received by Congress, added, "We have the opportunity to do more" than just a benefit for low-income seniors, and that states "don't want the added responsibility thrown at them." Republican Sens. Grassley and Olympia Snowe (Maine), while less dismissive of the proposal, also urged Thompson to seek broader reform (California Healthline, 1/19). Grassley, who will become chair of the finance committee tomorrow, said Bush "should be very flexible," while Snowe said she worried that "if we have a temporary program" for low-income seniors, "we may never get any more on prescription drugs" (Pear, New York Times, 1/19). The Washington Post reports that Sen. Bill Frist (R-Tenn.), one of Bush's "chief Senate allies," said yesterday he would support the block grant plan "only as a fallback if Congress proves unable to make headway on a more far-reaching plan to modernize Medicare and ensure its long term solvency" (Goldstein, Washington Post, 1/19).

But Thompson used Frist's rationale to defend the helping hand proposal. "While comprehensive reform may take some time to achieve, the American people are demanding a prescription drug benefit today. We must move immediately to help millions of low-income senior citizens who cannot afford the life-preserving prescriptions they so desperately need," he said. While he said that Bush still plans to submit the plan to Congress, Thompson indicated that the new administration will be willing to compromise on the issue. Citing a great "bipartisan spirit" for passing a drug benefit, Thompson said he believed that the helping hand program could "concurrently advance" with a Medicare reform package that includes a broader prescription drug benefit. "If we could come up with comprehensive reform, the president-elect would be one of the happiest guys in America," Thompson said. He added that the work of the 1998 National Bipartisan Commission on Medicare headed by Frist and Sen. John Breaux (R-La.), was a good place to begin a discussion of Medicare reform (California Healthline, 1/19). Under this approach, seniors with incomes up to 200% of the poverty level would receive drug coverage, with private insurers -- under federal oversight -- providing benefits (Koszczuk, Philadelphia Inquirer, 1/19).

Here's a brief look at some of the other issues and concerns discussed at yesterday's hearing:

• State Flexibility: Thompson said HHS should not be "heavy handed" or "locked into a one-size-fits-all" approach in its administration of state-federal programs. He said that greater flexibility, particularly for the Children's Health Insurance Program, should be accompanied by "more accountability." He cited BadgerCare, Wisconsin's CHIP program, as a good example of a "strong partnership" between the federal government and states.
  
• HCFA: Thompson said that several senators have told him that HCFA is "the biggest problem facing me." He added that "providers and payers are fed up" with the paperwork required by HCFA. Several senators shared this sentiment, as Sen. Don Nickles (R-Okla.) called the agency a "mess." Sen. Trent Lott (R-Miss.), who will resume his position as majority leader tomorrow, urged Thompson to "take a very, close hard look at HCFA" and to attempt to lessen its "excessive regulatory burden."
  
• Reimbursement rates: Several senators asked Thompson to work with them to reduce the discrepancies in reimbursement between providers who work in urban settings and those in who work in rural settings. Thompson sympathized with their concerns, noting that Wisconsin hospitals suffered the same problem, but added, "There's nothing more contentious than a formula fight."
  
• Organ Donation: Sen. Robert Torricelli (D-N.J.) criticized HHS' current policy of organ allocation, in which organs are donated nationwide based on need instead of on a regional basis, saying that this is unfair to states with good organ distribution programs. Thompson, who sued HHS over this policy, agreed, and said that good programs should be copied by other states, and that the best way to remedy the nation's current shortage in organs is to increase the number of donors (California Healthline, 1/19).