A key Republican lawmaker said last week that the Medicare reform plan released by the White House took too severe a bite out of managed-care plans, and he suggested Republicans might want to go further than the Clinton administration in trimming Medicare hospital payments.
Rep. William Thomas (R-Calif.), chairman of the House Ways and Means health subcommittee, cited a recent recommendation by the Prospective Payment Assessment Commission as "something we might want to look at."
Earlier this month, ProPAC recommended freezing hospital Medicare payment rates for inpatient care in fiscal 1998 in large part because hospital profits from such care hit a 10-year high (Jan. 20, p. 2). Although Thomas declined to say how big a bite Republicans would seek from hospitals, such a freeze would likely result in a higher level of savings than under the president's proposal.
The White House budget plan would reduce projected Medicare spending by $100 billion from fiscal 1998 through 2002. Payments to managed-care plans would be reduced by $34 billion while physicians would only suffer a $7 billion hit. Hospitals would see a $33 billion reduction in projected payments over the five-year period (See story, p. 2).
At first, Republicans were generally upbeat about Clinton's proposal. House Ways and Means Committee Chairman Rep. Bill Archer (R-Texas) called it a "very positive and very significant development." But within days, congressional Republicans became increasingly critical of the plan.
At a Senate Budget Committee hearing last week, Chairman Pete Domenici (R-N.M.) said it was "not a very good plan."
Thomas and other Republicans, including Senate Finance Medicare subcommittee Chairman Phil Gramm (R-Texas), criticized the White House plan for not containing structural overhauls.
"I will not support any plan that acts like Medicare is a leaky tire that we can patch today and then drive fast until it blows out," Gramm said.