Thompson ‘Vague’ in House Testimony on Specifics of Bush Medicare Reform Proposal

In testimony before the House Ways and Means Committee, HHS Secretary Tommy Thompson said yesterday that under President Bush's Medicare reform proposal, beneficiaries would not have to join an HMO to receive a prescription drug benefit, but he "left open the possibility" that they might have to join some type of private health plan to be eligible for a drug benefit, the New York Times reports. Thompson was "vague" about details of the plan, saying, "The proposal is still being worked on" (Pear, New York Times, 2/7). Bush's fiscal year 2004 proposal calls for a $6 billion "downpayment" on a 10-year, $400 billion Medicare "modernization" plan that the president mentioned in his State of the Union address and in a speech in Michigan last week. Although neither Bush nor the administration has released details about the plan, media reports have said that the plan is expected to establish a prescription drug benefit for Medicare beneficiaries who enroll in a new managed care program. According to reports, Medicare beneficiaries could remain in the traditional fee-for-service program, enroll in regional HMOs that offer prescription drug coverage or enroll in private health plans with "enhanced fee-for-service benefits" that include prescription drug coverage (California Healthline, 2/4). Thompson said yesterday that it was a "fallac[y]" that the Bush proposal would only offer a drug benefit to seniors who join an HMO, the AP/Fort Lauderdale Sun-Sentinel reports (Carter, AP/Fort Lauderdale Sun-Sentinel, 2/7). He added that he sees a "big distinction" between HMOs and other less restrictive health plans, such as preferred provider organizations. The Times reports that his "carefully worded answers" leave the door open for the administration to decide that seniors have to join some form of private health plan -- though not necessarily an HMO -- to receive a drug benefit.

Several lawmakers said at the hearing that they were "frustrated at the lack of detail" about the administration's Medicare proposal, the Times reports. Rep. Sander Levin (D-Mich.) asked Thompson about reports that there would be no prescription drug benefit for people electing to remain in the traditional program. Thompson said, "That remains one option. But there are several other options." Thompson "appeared to be in an awkward position" because he was requesting $400 billion for Bush's Medicare reform plan, but could not specify how the funds would be used, according to the Times. Meanwhile, CMS Administrator Tom Scully said, "I am as frustrated as [the lawmakers] are" about the lack of details (New York Times, 2/7).

Also during the hearing, Thompson urged Congress to act within the next 10 days to prevent a 4.4% reduction in the Medicare reimbursement rate to physicians, scheduled for March 1 (New York Times, 2/7). There are currently two proposals under consideration in Congress to rescind the rate cut. In January, House Ways and Means Committee Chair Bill Thomas (R-Calif.) sponsored a bill that would use the Congressional Review Act, which allows Congress to overturn regulations recently published by a federal agency, to cancel the scheduled reduction. Meanwhile, Sen. Charles Grassley (R-Iowa) added a Medicare payment adjustment to the Senate-approved omnibus 2003 appropriations package that would freeze physician payments at 2002 levels and increase reimbursements to rural and small urban hospitals (California Healthline, 1/23). In an "apparent switch," Thompson said "the administration has not taken a position" between the two approaches to prevent the cut, CongressDaily reports. Thompson said the administration "support[s] the concept" of delaying the cuts and "is hopeful Congress will be able to work it out" (Rovner/Fulton, CongressDaily, 2/6).