Senators Introduce Medicare ‘Giveback’ Package Directly to Floor

Senate Finance Committee Chair Max Baucus (D-Mont.) and ranking member Sen. Charles Grassley (R-Iowa) on Oct. 1 formally introduced a $43 billion Medicare provider "giveback" bill under a Senate rule that allows the bill to bypass the committee and move directly to the floor, CongressDaily/AM reports (Rovner, CongressDaily/AM, 10/2). According to an outline, the 10-year package includes "smaller-than-planned" cuts for hospitals and increases in payments for rural physicians, hospitals and home health agencies. Medicare+Choice plans reportedly would receive a boost in payments of 4% in 2003 and 3% in 2004. The bill also would reverse the expiration of $1.7 billion in temporary Medicare funding for nursing homes that expired Oct. 1. In addition, the package would expand a pilot program that uses competitive bidding for durable medical equipment nationwide. The plan also includes a provision that would allow Medicare to cover immunosuppressive drugs for organ transplants and would renew a five-year program that helps low-income seniors pay their Medicare premiums. The plan also includes a two-year delay of payment caps for physical and occupational therapy and would expand coverage of cholesterol and lipid level tests. The package also includes additional funding for state Medicaid and CHIP programs (Kaiser Daily Health Policy Report, 10/1). In a statement, Baucus and Grassley said they decided to move the bill to the floor without committee approval because "the Senate is tied up in knots right now, and Medicare fairness is too urgent to fall victim to gridlock." However, CongressDaily/AM reports that Baucus and Grassley would not have been able to move the bill through the committee because committee members Sens. John Breaux (D-La.) and Olympia Snowe (R-Maine) said they would not approve a giveback bill unless it included a prescription drug benefit. The prescription drug benefit issue still could become a problem on the floor, CongressDaily/AM reports. Baucus, however, said he would "not support reviving a drug debate that threatens passage" of the giveback package. It is not clear when the Senate will act on the measure. For their part, House leaders are discussing their options if the Senate passes a Medicare giveback package without a prescription drug benefit. In June, the House passed a Medicare prescription drug benefit as part of a Medicare reform package that also included $30 billion in provider reimbursement increases. Previously, "key lawmakers" said the House would not consider a Medicare bill without a drug benefit, but now House leaders are considering "various acceptable permutations" of a package because there is so little time remaining in the congressional session, CongressDaily/AM reports (CongressDaily/AM, 10/2).

Iowa To File Suit
In other Medicare news, Iowa Gov. Tom Vilsack (D) on Oct. 1 said he will sue the federal government to force a change in the state's Medicare reimbursement rates, the Des Moines Register reports (Leys, Des Moines Register, 10/2). In August, Vilsack sent a letter to HHS Secretary Tommy Thompson asking that CMS calculate states' Medicare payments "equivalently." The disputed rates stem from the Balanced Budget Act of 1997, which set payments to states based in part on data such as local wages and costs. Medicare per-beneficiary spending rate in Iowa is $3,053 per year -- the lowest of any state -- compared to the national average of $5,490 per year (Kaiser Daily Health Policy Report, 8/20). Thompson rejected the request, and Vilsack said he and state Attorney General Tom Miller (D) would "take the matter to federal court," the Register reports. Federal judges have rejected other states' claims that Medicare violated beneficiaries' constitutional right to equal treatment, but Miller said Iowa's lawsuit would use a law that requires Medicare administrators to use "actuarial equivalence" in setting reimbursement rates for Medicare+Choice plans. There are no Medicare HMOs in Iowa, a situation state officials blame on low reimbursements rates. In rejecting Iowa's request, Thompson said the problem was "caused by Congress and must be fixed by Congress." CMS Administrator Tom Scully said, "I understand the governor's frustration and the state's frustration. But suing this department is not the answer" (Des Moines Register, 10/2).

Medicare Formula 'Shortchanges' Iowa, Editorial Says
If the Senate Medicare giveback package is enacted, it would provide only a "temporary" payment boost and would not "reform the system that creates the reimbursement inequity in the first place," according to a Des Moines Register editorial. Given that Medicare "cheat[s]" Iowa by using a payment formula that "determines it's cheaper to live and practice medicine in this state," the formula "needs to be fixed to obtain fair reimbursements," the editorial says. While Iowans should "acknowledge" their congressional delegation for pushing to increase Medicare payments, the editorial concludes: "Changing a system that shortchanges Iowa should remain a No. 1 priority of our representatives in Congress" (Des Moines Register, 10/1).