Medicare reform legislation received a boost from an AARP endorsement, and some members of Congress hoped for a vote on the bill before this coming weekend. Over the past weekend Republican leaders reached a long-awaited deal to add a prescription drug benefit to Medicare and as part of that deal agreed to test rather than mandate a competitive bidding system that would put Medicare in competition with private health plans. For healthcare providers, the $400 billion measure would largely be helpful, giving hospitals a full inflation update in 2004 and linking future payment adjustments to quality reporting efforts. Rural providers would see significant new assistance, including a revision upward of their base Medicare payment rate to permanently match that of urban facilities. The agreement also would place an 18-month moratorium on physician referrals to new specialty hospitals in which the physicians hold a financial stake, while the Medicare Payment Advisory Commission studied whether the payment system for specialty facilities should be refined.
Physicians would escape a 4.5% Medicare rate cut scheduled for 2004 and 2005 and instead would receive a 1.5% increase for those years. The indirect medical education adjustment for hospitals would be 6% for the second half of fiscal 2004, 5.8% in 2005, 5.55% in 2006 and 5.35% in 2007. To reach an agreement that addressed concerns about putting Medicare in competition with private health plans, negotiators settled for a demonstration project starting in 2010. The House-Senate conference committee reconciling the Medicare reform bills passed by both chambers in June will meet tomorrow for an official vote on the proposal, a House aide said. The Congressional Budget Office is calculating the cost and is expected to release those numbers later today or sometime tomorrow. With three days for members to look over the bill before voting, debate could start Thursday but is more likely to begin Friday, sources said. Some lobbyists expected passage in the House and Senate before the end of the week, but congressional aides predicted debate at least through the weekend. -- by Jeff Tieman