Lawmakers send mixed signals on timing of Medicare bill

The heavy lifting is still months away, but a package of Medicare bills that Congress may take on late this year is beginning to take shape.

The heavy lifting is still months away, but a package of Medicare bills that Congress may take on late this year is beginning to take shape.

Lawmakers were consumed for the first half of this year with politicking over the controversial new Medicare Part D prescription-drug benefit, which made the congressional leadership and the White House strongly averse to tackling any legislation related to the healthcare program for the elderly and disabled. But with several of the program’s perennial problems due to resurface in 2007, many healthcare lobbyists say a drive in Congress for Medicare legislation is inevitable.

The GOP leadership in both chambers, not to mention the Bush administration, is said to be wary of opening the door to a wider debate on Medicare this year. A Medicare vehicle also would not enjoy the procedural protections against amendment that helped the leadership avoid such a debate during budget reconciliation last year.

Just as lobbyists are worried and unsure about what items might be addressed and what might be left out, the Hill is sending mixed signals about the timing of any move to work through a Medicare bill in 2006.

Although there is widespread agreement that no measure will move until after the August congressional recess, speculation is rampant that the leadership may opt to take final action on a bill during a lame-duck session after the elections.

Any Medicare legislation would create winners and losers, as lawmakers likely will look to offset billions of dollars of new spending with reductions in other areas of Medicare.

This prospect makes healthcare providers of all stripes nervous as their lobbyists are watching closely for developments on Capitol Hill. So far a smattering of bills have been introduced by rank-and-file members of the House and Senate and by key committee leaders, but a clear strategy has yet to emerge.

The biggest driver behind Congress’s tackling Medicare this year, yet again, is a strong desire by many lawmakers to prevent a cut in Medicare’s payments to physicians. On the other hand, the physician-payments provisions would be the most expensive to enact. The Congressional Budget Office has projected that even maintaining the current payment level for one year would cost about $10 billion.

With the failure of medical-malpractice tort reform in the Senate last month, blocking these cuts has become the physician lobby’s top priority.

Under a complex mathematical formula almost universally regarded as flawed, doctors are staring at an estimated 5 percent pay cut next year. Year after year, Congress has moved to prevent the cuts from taking effect, most recently by enacting a one-year fix as part of the Deficit Reduction Act that President Bush signed in February.

The nursing-home and physical-therapy sectors are pushing Congress at least to postpone strict limits on how much physical, speech and occupational therapy beneficiaries can receive in one year. Caps on the services are due to take effect Jan. 1.

Few lawmakers believe the caps are the appropriate policy, but eliminating them would cost more than $500 million. Rep. Phil English (R-Pa.) and Sen. John Ensign (R-Nev.) have sponsored bills to deal with the issue and, together, have attracted more than 300 co-sponsors, including House Majority Leader John Boehner (R-Ohio) and Majority Whip Roy Blunt (R-Mo.). Senate Finance Committee Chairman Chuck Grassley (R-Iowa) has tried for several years to get rid of the caps.

Pharmacies also have gained the support of a growing contingent of lawmakers for legislation to require Medicare Part D plans to pay drug claims within two weeks.

On a more politically sensitive issue, Grassley and Rep. Nancy Johnson (R-Conn.) are waging a campaign to enact legislation that would prevent beneficiaries who missed the May 15 deadline to sign up for Part D from being assessed a financial penalty if they enroll later.

The administration and the congressional leadership have been cool to the idea, despite enthusiasm among many rank-and-file Republicans, especially those vulnerable in the midterm elections, such as Johnson.

The question of the penalty is expected to be raised today during a House Ways and Means Committee hearing on the implementation of Part D. Johnson chairs the panel’s Health Subcommittee and held a hearing of her own in April, but Committee Chairman Bill Thomas (R-Calif.) has not publicly backed her effort.

Lawmakers have few realistic options available to pay for a package containing these or other costly provisions.

The most commonly cited source of savings is the so-called $10 billion “stabilization fund” that was created in 2003 as an inducement for health-insurance plans called preferred-provider organizations (PPOs) to do business with Medicare.

The health-insurance lobby has kept a watchful eye over some lawmakers’ interest in taking away this pool of money and has enjoyed the steady support of the administration. Grassley’s attempt to strip the fund during budget reconciliation was stymied in large measure by White House resistance.

The home-healthcare providers also have reason to worry, as Congress has frozen their payment rate for several consecutive years, behind the political cover of reports by the Medicare Payment Advisory Commission, which makes annual recommendations to Congress.

Hospitals are at relatively lower risk, but lobbyists continue to keep close tabs on the discussions about how to pay for the doctor payments and other provisions. This sector is particularly mindful of its vulnerability because the Centers for Medicare and Medicaid Services is in the process of undertaking a massive overhaul of the formula used to calculate payments for medical procedures performed in hospitals.

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