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Prescription
for Politics
By
LAURIE MCGINLEY and SARAH LUECK
WASHINGTON - The House and Senate Medicare bills would provide a lot more than a drug benefit to seniors. An array of other provisions would help -- and in some cases, hurt -- specific companies, industries and states, including biotech titan Amgen Inc. and doctors in Alaska. Some provisions would extend Medicare coverage for specific products or services, or give their makers a foot in the door. Others would increase reimbursements for items covered by the government health-insurance programs. A number of the special provisions won't survive the House-Senate conference that is to begin soon and is likely to produce a final Medicare bill after Labor Day. But all are being pushed feverishly by lobbyists determined not to miss the biggest piece of health legislation in years. "It's all pent-up demand," says Fred Graefe, who lobbies for the for-profit hospital industry and other interests. Ron Pollack, executive director of Families USA, a liberal advocacy group that wants Congress to pass a more-generous drug benefit, adds: "It's an industry pattern. Different parts of the industry try to get their piece of the gravy train." The political impulse to do favors for constituents is restrained this year by a cap on the size of the Medicare bill. As a result, many of the single-issue provisions don't carry price tags. One of the most contentious, for example, involves specialty hospitals. Sometimes called "boutique" hospitals and "cash cows" by critics, these facilities focus on areas such as heart or orthopedic care and often are owned in part by physicians. Backers say the facilities provide high-quality and efficient care. But community hospitals say the ventures are skimming profitable specialties while leaving general hospitals to handle money-losing treatments such as trauma care. The Louisiana Hospital Association appealed to the state legislature this year to rein in the specialty hospitals, and was rebuffed. But Sen. John Breaux (D., La.) inserted a provision in the Senate Medicare bill that would freeze the growth of specialized hospitals by barring doctors from referring patients to any new facilities in which they hold ownership interests; existing facilities and those nearly completed would be grandfathered. Big hospital groups such as the American Hospital Association, which represents 5,000 hospitals, and the Federation of American Hospitals, made up of more than 1,000 for-profit hospitals, strongly support the provision. Specialty hospitals say the change would severely hamper the industry and reduce competition. The House, leery of the Senate approach, would merely require a study of the issue -- an approach endorsed by MedCath Corp., a chain of cardiac-care hospitals based in Charlotte, N.C., and its lobbyists, which include the law firm of Republican bigwig Haley Barbour and former Democratic Sen. Birch Bayh. The American Surgical Hospital Association, made up of 50 surgical hospitals, agrees.
On a smaller scale, Theragenics Corp., which makes rice-sized radioactive seeds implanted in the prostate to treat cancer, is also looking for a change in Medicare rules. The Buford, Ga., company says Medicare's payment method penalizes hospitals that use a high number of seeds, often required in treating older men or patients with more aggressive cancer. The congressman whose district includes the company, Rep. Nathan Deal, (R., Ga.), added a provision to provide full reimbursement for the therapy for next three years while more data are collected. The Senate bill doesn't go as far. Heading the lobbying effort for Theragenics is the Washington Group, which is run by former New York Rep. Susan Molinari. Her father, former New York Rep. Guy Molinari, underwent the Theragenics treatment in 1997 and has been cancer-free since, she says. In some instances, drug companies are trying to get Congress to mandate things the Medicare bureaucracy can't or won't do. The Senate bill would force Medicare to cover self-injectable medications for diseases such as rheumatoid arthritis and multiple sclerosis. Due to a quirk in Medicare policy, the program typically doesn't cover medicines unless they are administered in a doctor's office, giving an advantage to products that must be injected by a health professional. For example, Medicare pays for Johnson & Johnson's arthritis drug Remicade, given intravenously in medical offices, but not to rivals Humira, made by Abbott Laboratories Inc., or Enbrel, marketed by Amgen and Wyeth. The Senate legislation would begin covering self-injectable drugs next year -- if the drugs have alternatives already covered by Medicare. The provision would cost $500 million for two years; after that, the drugs would be covered under the new drug benefit. Other self-injected medicines that could gain coverage include Avonex, made by Biogen Inc.; Rebif by Serono SA; Copaxone by Teva Pharmaceutical Industries Inc., and Betaseron by Schering AG unit Berlex Laboratories and Chiron Corp., all for multiple sclerosis. A House provision would limit such coverage to a three-state demonstration project. The Medicare bills also would boost payments for providers in certain areas, including hospitals in rural locales. Sen. Ted Stevens (R., Alaska) won a provision that would increase Medicare payments to physicians in his state by an average of 50% under a two-year demonstration project that would cost $48 million. Because of Alaska's high costs, Medicare on average covers only 37% of physicians' costs, said a Stevens aide. Hospitals in Puerto Rico, which traditionally have gotten lower payments than their counterparts on the mainland, also would get an increase under the bills. "It's a fairness issue," says Chip Kahn, president and chief executive of the Federation of American Hospitals. At the time the rates were set, he says, the island's costs were so much lower, but they have escalated since and payments haven't kept pace. Two of his group's members, Universal Health Services Inc., based in King of Prussia, Pa., and United Medical Corp., based in Windermere, Fla., own hospitals in Puerto Rico. In addition, both the House and Senate bills would speed up Medicare coverage of medical devices. That would likely help Medtronic Inc., St. Jude Medical Inc. and Guidant Corp., as well as the legions of small device makers. Key players in the Medicare legislation can use their positions to pursue pet projects -- and do. Senate Finance Committee Chairman Charles Grassley of Iowa, for instance, along with Sen. Olympia Snowe (R., Maine), are pushing an experiment that could pave the way for Medicare to pay for weight-loss programs. Sarah Ferguson, the duchess of York and a spokeswoman for Weight Watchers International Inc., recently was lobbying lawmakers. Medicare currently covers only one-on-one nutrition counseling. The demonstration project would explore how group programs measure up. Sen. Grassley, whose state is home to Palmer College of Chiropractic in Davenport, is also pushing a three-year demonstration project to determine whether Medicare should expand coverage of chiropractic services. Medicare now covers manipulation of the spine but not X-rays, physical therapy and other services. Copyright ©
2002 Global Action on Aging
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