The Senate Finance Committee this month will begin working on Medicare reform legislation that likely will increase payments to home health agencies, nursing homes and hospital outpatient departments, a Republican aide said last week.
The Finance Committee probably will begin with a relief provision equal to what President Clinton proposed in his Medicare reform plan, $7.5 billion over 10 years. It will be part of a larger Medicare-reform package.
"We don't want to outbid the president," said the aide, who didn't want to be quoted by name.
In the House, Rep. William Thomas (R-Calif.), chairman of the House Ways and Means health subcommittee, is said to be seeking $8 billion to $10 billion over five years to fund changes to Medicare payment policies established by the Balanced Budget Act of 1997.
Hospitals and other providers complain that those payment policies will save the government far more than the $115 billion over five years projected when the law was enacted in 1997 and are asking for an increase in payments.
It was not clear how the Finance Committee plans to offset those spending increases. Clinton proposed diverting $328.5 billion of federal surplus dollars to shore up Medicare's overall financing, from which he would draw the $7.5 billion for provider payment increases.
The overall reform bill also is likely to include an outpatient prescription drug benefit, although its shape has not been determined. Inclusion of such a benefit may require changes to enrollee cost-sharing, the aide said.
"It has tremendous political velocity," a Senate Democratic aide said. "It's an election changer."
Finance Committee members also will look at short-term stabilization of the Medicare+Choice program through changes in its risk-adjustment mechanism, with an eye toward preserving and expanding beneficiary choice of health plans in a reformed Medicare system, the aide said.
Changing the governance of the Medicare+Choice program also could be a possibility. The aide said some committee members believe HCFA has a "conflict of interest" in running the system because it views Medicare+Choice plans as competing with traditional Medicare for the same beneficiaries.
Comprehensive reform of Medicare into a program that helps seniors pay health insurance premiums still could be on the table, the GOP aide said.
Although Clinton doesn't back the "premium support" proposal drafted by the National Bipartisan Commission on the Future of Medicare, the aide noted that Clinton, like the commission, supported giving Medicare beneficiaries cash rebates for choosing lower-cost private-sector health plans.