Congressional leaders' agreement on a $28.5 billion Medicare payment relief package touched off a fierce lobbying battle between hospital and insurance groups and a showdown between the White House and the GOP-led Congress.
At issue is how the relief money will be split among the special-interest groups fighting for it. For now, nearly half the money would go to HMOs that contract with Medicare for care to beneficiaries.
The thought of giving more money to the most-criticized segment of the healthcare community drew howls from all quarters.
"What can Congress be thinking?" asked D. Ted Lewers, M.D., chairman of the American Medical Association's board. "Big insurance is spending more than $100 million to kill patients' rights, and it looks like Congress' only response is to grant them billions in new dollars."
Publicly, HMOs wouldn't get into a war of words with providers over the specific dollar amounts contained in the legislation, but their leaders said the relief was justified.
"(Medicare+Choice) is a program in crisis," said Susan Pisano, spokeswoman for the American Association of Health Plans. "This is a program that is the foundation for the future of Medicare."
Congressional leaders last week agreed to a $28.5 billion package of Medicare payment increases to reverse payment-growth restraints enacted under the Balanced Budget Act of 1997. While they did not fully disclose details of the package, it melds legislation put forth by the Senate Finance Committee and the House Commerce and Ways and Means committees.
The path ahead is unclear. Reports from congressional aides suggested several strategies for passing the package, including attaching it to spending legislation or pushing it forward as a stand-alone bill.
It's also unclear whether congressional leaders will negotiate with the White House over the package's distribution of spending or try to goad Clinton into vetoing it as they attempt to score political points for the Nov. 7 election.
In separate letters hours apart, Clinton and five major Catholic healthcare systems objected to a tilting of the relief package too much toward Medicare+Choice plans. The AMA made its points in an advertisement in a Capitol Hill newspaper.
Clinton echoed the AMA's sentiments in his letter to House Speaker J. Dennis Hastert (R-Ill.).
"Managed-care reform in the 106th Congress should focus on patient protections, not on excessive payments to managed-care plans," Clinton wrote.
Clinton cited "vulnerable hospitals" as one of many parties that would be deprived of funding because of "unwarranted managed-care payment increases."
The HMO industry used the same strategy employed by the hospital industry to win payment concessions from Congress. Led by the AAHP, the managed-care industry argued that payment-growth restraints were forcing Medicare+Choice plans to pull out of some counties and pare benefits or increase beneficiary cost-sharing.
That tack parallels the hospitals' strategy of arguing that Medicare payment caps have forced hospitals to cut services, reduce staffing and even close.
In the unified package, the hospital community got about half of its major objective, rolling back reductions to annual updates in Medicare inpatient hospital payments. The hospitals wanted two years of full inflationary increases, but got one.
While pushing Congress to increase its share of the legislation, AHA officials said the compromise package still represents an improvement over the balanced-budget law.
"It's still a net gain for hospitals," said Richard Pollack, the AHA's executive vice president.