The House last week narrowly passed a budget blueprint for federal fiscal 2001 that sets aside $40 billion in surplus revenue over five years for Medicare reforms, including potential provider payment increases and a prescription drug benefit.
But the final value of that reserve fund may be in doubt, as the Senate is preparing to begin work this week on its own blueprint that has just $20 billion set aside for those causes.
Likewise, the House vote left unclear whether provider payments could be increased should Congress fail to reach agreement on a prescription drug benefit. The language in the blueprint authorizes use of the $40 billion only if Congress passes Medicare reforms and a drug benefit. It doesn't say what will happen should Congress pass only reforms or a drug benefit.
Although Medicare provider payment increases and structural reforms have been discussed by members of Congress, adding prescription drugs to the array of Medicare benefits has dominated this year's debate.
The drive for drug coverage could force an election-year Congress to choose between the politically popular benefit expansion and the provider-popular increased Medicare reimbursement.
"It's clear (provider payment increases are pitted) against the pharmaceutical benefit," said Herb Kuhn, vice-president of advocacy for Premier. "It's Congress' fear of the fall election."
"The reality is if there's a big drug bill, it probably would squeeze out the (provider payment increases)," said Thomas Scully, president and chief executive officer of the Federation of American Health Systems.
But Richard Pollack, executive vice president of the American Hospital Association, said the reserve fund is an important symbolic measure.
Hospital lobbyists highlighted the lack of provider payment reductions in the House budget resolution. That's in contrast to President Clinton's budget plan, which financed a drug benefit partly through $19 billion in provider payment reductions and beneficiary cost increases over the next five years.
House Republicans highlighted Clinton's reductions as they pushed the budget resolution toward its eventual passage by a 211-207 margin late last week.
"We are strengthening Medicare . . . and providing for our neediest senior citizens a prescription drug benefit," said House Budget Committee Chairman John Kasich (R-Ohio).
But Democrats criticized the budget, saying the $40 billion set-aside would return to the budget surplus if no Medicare legislation is passed.