Medicare Compliance & Reimbursement

Thirteen conservative GOP representatives, all of whom voted "reluctantly" for the House Medicare bill, vowed Sept. 17 to oppose any conference report that lacks provisions that they view as essential to control costs and promote competition.

"We cannot in good conscience vote for the Medicare prescription drug benefit bill when it comes out of conference unless it includes four specific reforms," they write in a letter to House Speaker Dennis Hastert (R-IL) that was organized by Rep. Pat Toomey (R-PA). One key demand is that a bill include the House's so-called premium-support provisions, which would introduce direct competition between traditional Medicare and private plans beginning in 2010.

Many Democrats believe premium support would end up segregating older and sicker seniors in traditional Medicare, and Senate Minority Leader Tom Daschle (D-SD) has threatened to filibuster any conference report that includes it.

In Sept. 16 remarks to reporters, Daschle voiced growing skepticism that negotiators could bridge the deep differences now. He suggested that a broad revamping of Medicare could wait until next year, and in the meantime Congress could take modest steps with bipartisan support, such as providing a drug discount card and allowing reimportation of less expensive American-made drugs from abroad.

The GOP House members want enactment of a broad, House-like bill with the addition of a measure designed to ensure that drug costs do not exceed the budgeted amount of $400 billion over 10 years. As a back-up option, however, the group proposes a scaled-back plan: "Specifically, we would support a basic drug subsidy for low-income seniors and a catastrophic coverage for middle-income seniors."

Others, including conference chair Rep. Bill Thomas (R-CA) and Sen. John Breaux (D-LA), vehemently argue that Congress must and will produce a full-dress Medicare bill this year, and congressional staffers from both parties have said that next year will be too politicized by the presidential election for any further progress.

However, there are increasing indications that the end result, this year at least, may be a scaled-back, low-income-plus-catastrophic approach, likely including provider-payment provisions and, perhaps, reimportation.

Conervatives Demand Cost Containment Competition

The Toomey letter signatories tell Hastert that his offer "to work towards the inclusion of a cost containment provision in any conference agreement with the Senate was a key to our decision to vote in favor of HR 1, which passed by just one vote."

Rep. Jeb Hensarling (R-TX) said a possible cost-containment measure would be language altering premiums and copays if drug spending runs too high. A second would be a commission - like the one Congress created to decide which military bases to close - that would recommend additional cost-cutting measures if spending exploded. Congress would "fast track" an up-and-down vote on such recommendations with no amendments allowed.

The letter says any legislation must include "a generous expansion of health care savings accounts" and "no price controls on the U.S. drug industry."

Toomey said that he personally does not view reimportation as price control but that opinions differ among the signatories. Some conservatives argue that reimportation amounts to importing foreign governments' price controls into the U.S. market.