House Republicans last week began waging a campaign to garner conservative Democratic support for limited Medicare and Medicaid spending reforms.
At the same time, a bipartisan group of senators, led by John Chafee (R-R.I.) and John Breaux (D-La.), continued to piece together their own plan, which they hope will be close enough to the conservative Democratic proposal in the House to make some consensus possible.
The conservative Democrats, known on Capitol Hill as the "Blue Dogs," are also being courted by Rep. William Thomas (R-Calif.), chairman of the House Ways and Means health subcommittee. Thomas is pushing a package of Medicare reforms that would save $168 billion over six years.
The Blue Dogs' chief negotiator, Rep. Collin Peterson (D-Minn.), said he didn't expect to wrap the negotiations up until this week.
Sources familiar with the proposal said it would include House-passed provisions allowing provider-sponsored networks to serve Medicare beneficiaries. Hospitals consider the House PSN measure to be more favorable than one included in the compromise budget bill that Congress eventually sent to the White House.
Providers are optimistic that the Chafee-Breaux plan being developed in the Senate also may contain PSN language favorable to providers. At last week's American Hospital Association meeting, Breaux said provider networks should have "different rules and regulations, at least to get started."
Meanwhile, the Blue Dogs' plan would keep hospital payment updates at the rate of hospital inflation minus two percentage points from 1997-2002, while the three different Medicare physician payment bases would be consolidated into one beginning in 1997, sources said.
"I'm building a program that Democrats and Republicans in the House can agree to," Thomas told reporters after speaking at the AHA's winter meeting in Washington.
In an interview, Rep. Gary Condit (D-Calif.), a Blue Dog leader, said the group's aim in negotiating with Thomas was not to garner the support of enough Democrats to override a potential veto from President Clinton. Instead, Condit said the group wants enough Democratic support for a Medicare reform bill so Clinton will be comfortable signing it.
After briefing Blue Dogs on the Medicare talks last week, Peterson said members of the group still wanted them to continue. "I really think we're close enough that we can work this out," Peterson said.
Another group of Republican moderates released a balanced-budget plan that sought $187 billion in savings from Medicare over six years.
A leader of that group, Rep. Christopher Shays (R-Conn.), a member of the House Budget Committee, said its Medicare policies will parallel Thomas' bill, except with a higher Medicare Part B premium.
One major difference is that Shays' plan, unlike the other GOP proposals, doesn't include a tax cut.
The GOP moderates also propose to save $85 billion in Medicaid spending over six years, identical to what the Blue Dog Democrats have proposed in their balanced budget bill.
On Medicaid, Democrats and Republicans said that opposing sides seem to be coming closer to compromise on how to restructure the system. The difference has been between Republican governors, who have insisted that federal Medicaid payments be turned over to the states in lump-sum payments called block grants with no strings attached, and Democrats, who insist that entitlements for some poor, disabled and elderly be retained.
Shays said he believed the compromise will center on a capped entitlement to the states, which would be similar to a block grant but with more requirements on who the states must cover. "I don't think there's any chance we can get Medicaid as a block grant," Shays added.