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U.S. Congress gears up for Medicare fight

By Julie Rovner

Reuters Healt, May 8, 2003

WASHINGTON (Reuters Health) - If the U.S. House and Senate fail to pass bills to add a prescription drug benefit to the Medicare program and make other program reforms this summer, the effort might have to be put off until after the next election, members of Congress and key aides said Wednesday.

"I don't know if the time is ever going to be more right than it is right now," Sen. Jim Bunning, R-Ky., told a Capitol Hill seminar sponsored by Banc of America Securities LLC.

Bunning said a key goal of legislation taking shape in the Senate is to encourage Medicare beneficiaries to move to private plans where costs are more easily contained.

"We want to incentivize our younger seniors into" preferred provider organizations, he said. "Then we can get a lot more control of our costs down the line."

Preferred provider organizations, or PPOs, tend to be less restrictive than HMOs, or health maintenance organizations. PPOs steer patients towards certain doctors and hospitals but typically avoid requirements that a worker obtain a referral before seeing a specialist and get a plan's approval before beginning treatment.

But Rep. Jim Cooper, D-Tenn., said it is unlikely that a bill can pass that offers broad drug coverage only to those willing to move out of Medicare's traditional fee-for-service program -- the key incentive Bunning mentioned. "Regardless of the theoretical arguments, any prescription drug plan pretty much has to cover everyone," he said.

House Republicans leaders have vowed to bring a Medicare drug-and-reform bill to the floor for a vote by Memorial Day; Senate leaders have said they want to finish their bill by the July 4 recess.

White House health policy adviser Doug Badger, who addressed the group later in the afternoon, agreed that is an ambitious schedule.

"But the committees have come a lot further and moved a lot quicker than many have expected until now," Badger said, referring to the three panels in the House and Senate that oversee Medicare. The House Ways and Means Committee could act on its bill as early as next week.

Still, staffers from the Senate Finance and House Energy and Commerce Committees, who also addressed the group, said that while they are optimistic, the task remains a difficult one.

One key problem, said Colin Roskey, who works for Finance Committee Chairman Charles Grassley, R-Iowa, is that Medicare reform plans and the drug benefit are competing for the same $400 billion pot of money.

"Medicare reform costs money," he said. "PPOs cost more than Medicare-administered prices." But money for reforms reduces the amount available to pay for promised prescription drugs for the program's 41 million beneficiaries.

"Members will have to make tough choices," said Jenny Hansen, an aide to Energy and Commerce member Richard Burr, R-N.C., not just between a drug benefit and program reforms, but also whether to use some of the money to help doctors, hospitals, and other providers who say their Medicare payments are too low.