White House Policy Adviser Defends Bush’s Medicare Provider Payment Provisions, Drug Discount Card

White House health policy adviser Mark McClellan yesterday defended the Bush administration's "insistence" that any increases in reimbursements to Medicare providers this year be offset by decreases in payments to other providers, CongressDaily reports (Rovner, CongressDaily, 2/21). Medicare reduced reimbursement rates for physicians by 5.4% in January under a formula approved by Congress in 1997 (Kaiser Daily Health Policy Report, 1/15). In addition, home health care providers are scheduled to receive a 15% cut in reimbursements in October (CongressDaily, 2/21). Physicians have warned that if Congress does not reverse the reimbursement decrease, they may cut back Medicare services or exit the program altogether (Kaiser Daily Health Policy Report, 1/15). But speaking at a briefing with reporters, McClellan said that "softening" those cuts "would require reducing payments for other providers." McClellan said that the administration hopes this year to add a prescription drug benefit to Medicare and to provide "more choices" in health coverage for Medicare beneficiaries. "Our priority is beneficiaries," he said, adding that the problems with provider reimbursement rates "are indicative of the problems with Medicare generally."

Rx Discount Card
Speaking at the briefing, McClellan also said the administration would unveil a revised pharmacy discount card plan "very soon." He said that the administration hopes pharmacists "will be happier" with the new proposal, which will "spell out more clearly that manufacturers, not only pharmacies, will provide the discounts." McClellan said, "We've listened to the concerns they've expressed" (CongressDaily, 2/20). Under the discount card plan that President Bush unveiled last July, pharmacy benefit managers would have negotiated discounts with drug makers and pharmacies and sold cards to Medicare beneficiaries for up to $25, allowing patients to purchase pharmaceuticals at a 15% to 20% discount. The National Association of Chain Drug Stores and the National Community Pharmacists Association filed suit last July to block the proposal, arguing that the administration lacked the authority to implement the plan without congressional approval and that it drafted the plan without open meetings or a public comment period, a violation of federal rules. Last September, U.S. District Court Judge Paul Friedman issued a temporary injunction against the plan, ruling that the White House may have lacked the authority to establish the program without congressional approval or a public comment period. In November, he issued an "unusual clarifying memo," which allowed CMS to "revise" the plan. Medicare officials said in January that they would publish for public comment a revised version of the proposal that may require drug makers to assume part of the cost of the discounts offered in the plan to address the concerns of pharmacists and courts (Kaiser Daily Health Policy Report, 1/28).