Provider payment relief is likely to become part of a Medicare modernization and prescription-drug bill introduced yesterday by a "tripartisan" group of senators. The bill itself contains no reimbursement aid for hospitals, but in a news conference co-sponsor Sen. John Breaux (D-La.) said, "You can bet a dollar to a doughnut there will be provider givebacks" once the Senate Finance Committee takes up the legislation.
The Finance Committee may begin considering the legislation as early this week, Breaux said. In addition to Breaux, the bill was introduced by Sens. Olympia Snowe (R-Maine), Jim Jeffords (I-Vt.), Orrin Hatch (R-Utah) and Charles Grassley (R-Iowa).
As proposed, the 21st Century Medicare Act would create a Medicare prescription-drug benefit requiring a $250 annual deductible and a 50% copay until beneficiaries' spending reaches $3,450 annually. Once beneficiaries have spent $3,700 out-of-pocket, including the deductible, they would pay no more than 10% of their drug expenses.
A controversial component of the legislation involves the private companies that would manage the drug benefit supported by federal subsidies. Although senators said the health plans would be required to cover drugs in all therapeutic categories, some groups worried that the use of outside companies would prove troublesome.
"This bill, like its House counterpart, provides billions of dollars in subsidies to HMOs and big drug companies and allows them to make most of the important decisions about coverage, costs and what drugs to include, not Medicare beneficiaries," the Alliance for Retired Americans said in a written statement Grassley, however, declared, "Our bill is not a Christmas gift to drugmakers."
A second group of senators, which also has a prescription-drug bill pending, criticized Grassley's plan as "written to suit the drug companies." Pharmaceutical companies, they said, have spent millions of dollars to ensure the success of House and Senate bills that are friendly to the drug industry and less helpful to Medicare beneficiaries.
With their lobbying efforts and advertising budgets, major drug companies represent "the next cigarette industry," Sen. Charles Schumer (D-N.Y.) said during a news conference today. Schumer's Medicare prescription-drug bill, which is co-sponsored by Sen. John McCain (R-Ariz.), is one of three such bills now circulating Congress and also is likely to gain provider reimbursement provisions on the way, a senior Democratic aide said.
Under the bill introduced by Grassley and his colleagues, a new Medicare Part D would provide a prescription-drug benefit as of January 2005. The act also would create an "enhanced fee-for-service benefit package" for Medicare, similar to those found in employer-sponsored plans.
Including all its provisions, the bill would have a projected cost to the federal government of $370 billion over 10 years, according to an official estimate by the Congressional Budget Office.