Medicare price tag storm rages on

Lawmakers yesterday demanded answers on the administration’s new price tag for the Medicare drug bill and questioned why the figures were not released earlier. At a press briefing Monday, Centers for Medicare and Medicaid Services (CMS) chief Mark McClellan dodged questions regarding the long-term cost of the drug benefit, saying that 10-year projections were unavailable.

Lawmakers yesterday demanded answers on the administration’s new price tag for the Medicare drug bill and questioned why the figures were not released earlier.

At a press briefing Monday, Centers for Medicare and Medicaid Services (CMS) chief Mark McClellan dodged questions regarding the long-term cost of the drug benefit, saying that 10-year projections were unavailable.

The 10-year score of $724 billion was provided to media outlets Tuesday evening, triggering front-page news in The Washington Post, The New York Times and other newspapers.

Reeling from the news coverage and criticism from Congress, CMS scheduled another press conference yesterday.

A CMS source told The Hill, “I don’t know why we didn’t get that figure out there [earlier].”

The CMS source downplayed the 10-year estimate, saying it was simply adjusted to include 2014 and 2015: “We took off the first two years [2004 and 2005] where there was little expenditure for prescription drugs and added on two much more expensive years.”

Asked why the 10-year cost was not released earlier, McClellan said yesterday, “Well, the budget just came out on Monday. … You all asked about the numbers yesterday, and we’re providing them today.”

The Congressional Budget Office yesterday informed Congress that its score of the bill is $558 billion over 10 years.

At a Senate Budget Committee hearing yesterday, ranking member Kent Conrad (D-N.D.) said, “Let me just say that this damages the credibility of this administration in a very serious way with respect to the rest of their budget proposal because there is a pattern here … of concealing from Congress and the American people the true fiscal condition of this country.”

House Ways and Means Committee ranking member Charles Rangel (D-N.Y.) also questioned the administration’s credibility: “How can we trust them on Social Security when they did not play straight with the facts on Medicare?”

Rick Foster, CMS’s top actuary, said last year he would have been fired if he provided his price tag of the Medicare bill as it was working its way through Congress.

During the Senate hearing, Budget Committee Chairman Judd Gregg (R-N.H.) pressed Office of Management and Budget Director Joshua Bolten on the Medicare bill’s cost. Gregg was so eager to get answers that he posed questions before Bolten had delivered his testimony.

Bolten claimed that OMB estimates for the long-term costs of the drug benefit remained the same and that the press reports did not offer an “apple-to-apple comparison.”

Some fiscal conservatives said the increased cost estimates would prompt them to provide even greater oversight of the new drug benefit.

“We need to watch it like a hawk,” said Sen. Jeff Sessions (R-Ala.). “We need to make it such that this thing does not surge beyond what’s anticipated. I am going to be far more concerned with these types of programs in the future.”

Sessions, who backed the drug bill last year, said he had pushed unsuccessfully to have Democrats accept caps in the program’s annual costs.

Responding to questions after the hearing, Gregg — who has called for efforts to trim prescription-drug expenses that run over original estimates — took a softer line on the latest estimates.

“Even though I’m cynical, I believe the numbers that are being thrown around today are inaccurate,” he told a small group of reporters today. Gregg said that he would like to see a lot of savings in Medicare but that he didn’t have the authority to require changes — noting that the Finance Committee had that ability. He declined to name what specific cuts he might like to see. Gregg voted against the Medicare bill in 2003.

Gregg, who failed to move a bill on drug reimportation out of the Health, Education, Labor and Pensions Committee when he chaired it last year, didn’t rule out action on the subject — although he observed that such a change hasn’t been determined to provide cost savings. “I’m open to the issue if it” saves money, he said.

Sen. Edward Kennedy (D-Mass.) used the release of the figures as an opportunity to tout the importance of his own bill on drug reimportation, announced yesterday. “The administration’s new estimate of the cost of its Medicare drug program makes action on drug importation even more urgent,” Kennedy said in a press release.

“The Republicans had the nerve to complain about the cost of our Medicare prescription-drug proposal when our proposal actually provided a real benefit for seniors,” said Rep. John Dingell (D-Mich.), ranking member of the Committee on Energy and Commerce. “These new numbers show that their proposal costs almost as much, but with a paltry benefit for those most in need coupled with generous benefits to the drug companies.”

Geoff Earle contributed to this report.

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