An amendment that would equalize Medicare and private-sector provider rates by the year 2005 makes the cost containment framework in the healthcare reform plan approved by the House Ways and Means health subcommittee even more onerous in providers' view.
The amendment, sponsored by Rep. Jim McDermott (D-Wash.), was added by voice vote to the proposal drafted by Rep. Fortney "Pete" Stark (D-Calif.) in consultation with subcommittee Democrats.
Rep. Stark's proposal, which passed the committee after a last-minute deal united all six Democratic members, included a provision that would impose Medicare-type rates on the private sector in the event that national spending targets-designed to gradually lower the rate of healthcare spending growth to that of the gross domestic product-were breached. That provision was later altered so that compliance with spending targets would be based on state, rather than national, goals.
But while that change took some of the sting out of budget caps and all-payer pricing, Mr. McDermott's amendment rubbed salt on the wound by proposing to equalize Medicare and private sector rates by the year 2005.
The original Stark plan would have retained a 15% differential between Medicare and private-sector rates. Mr. McDermott, the lead sponsor of single-payer legislation in the House, argued that it would senseless for Medicare to pay 15% less than other payers for the same procedure. Under his amendment, beginning in the year 2001, the rate of increase in private-sector payment rates would slow to roughly 1% annually, until the year 2005, when they would be equal to Medicare rates.