Medicare Compliance & Reimbursement

Republican leaders on Capitol Hill have set a new deadline of Oct. 17 for congressional negotiators to agree on a Medicare prescription drug benefit and a reorientation of the program towards private plans.

However, as comments by conference committee chair Bill Thomas (R-CA) and others make clear, the deadline is not hard and fast, and may indeed be too hard and too fast.

Senate Majority Leader Bill Frist (R-TN) and House Speaker Dennis Hastert (R-IL) announced the deadline following a Sept. 24 meeting with conferees. But Thomas told reporters he himself has not set a deadline, and other conferees have made no secret of their concern that the large remaining differences may not be bridgeable so quickly. For example, conference vice chair Sen. Charles Grassley (R-IA) told Iowa reporters, "I'm not sure we're going to get it done by Oct. 17," according to the Des Moines Register.

Many observers have said that comprehensive Medicare revamping is possible only with much more intensive personal involvement by President Bush. The president tried to provide some of that involvement when he met Sept. 25 with conferees, exhorting them to produce a bill. But after the meeting both Republicans and Democrats said Bush spoke in generalities and did not offer details of what compromise legislation should look like, according to CQ Today.

Meanwhile, many critics argue, often but not exclusively from the right, that both the House and Senate bills are too expensive and would prompt businesses to drop retiree coverage. At a Sept. 24 hearing of his Government Reform Subcommittee on Human Rights and Wellness, Rep. Dan Burton (R-IN) promoted a scaled-back benefit aimed at low-income beneficiaries. The proposal, which he called a work in progress, includes a "hard cap" designed to keep costs under $200 billion over ten years by allowing the Health and Human Services Secretary to vary benefit parameters if costs run too high.

Burton's draft would offer a catastrophic drug benefit, kicking in after $3,000 of total drug costs, to

Not everyone agrees this would lower costs, however. On Sept. 8, for instance, a GOP staffer vigorously defended the House bill's reliance on pharmacy benefit managers negotiating discounts on behalf of competing private plans. The aide pointed out that the Congressional Budget Office gave the House bill a higher "cost management factor" - a measure of "how effective the bill is at making people take generics and negotiating lower rates" - than any aother bill and twice as high as the House Democratic alternative, which allowed the government to directly negotiate with pharmaceutical companies.