Before the president even had a chance to sign the sweeping Medicare reform bill Congress handed him last week, opponents were vowing to fight some provisions that won't take effect for years, raising questions about the bill's long-term prognosis.
In the near term, at least, the $395 billion Medicare reform package, centered around a new drug benefit for seniors, promises major changes for beneficiaries and a boon to healthcare providers.
Over the vociferous objections of many Democrats, some senior advocates and the AFL-CIO, the Senate last week passed the Medicare Prescription Drug, Improvement and Modernization Act of 2003 by a vote of 54-44. The Senate vote followed a cliffhanger 220-215 vote in the House the previous weekend. President Bush, who has lobbied hard for the reform package, is expected to sign it early this month.
"We finally delivered for seniors," HHS Secretary Tommy Thompson said last week. "Seniors will now have access to modern medicine delivered in a modern way."
The heart of the bill, the prescription drug benefit, won't kick in until 2006. Meanwhile, competition between private health plans and traditional Medicare is the subject of a demonstration project that would not start until 2010. Some Democrats already have seized on the enormously complex legislation as campaign fodder and are looking to overturn these and other provisions before they can take effect.
"We do have two years before it gets implemented and I'm hoping that as people really study it and look at the implications, we can begin to make some changes going forward that would improve the bill in terms of the benefits for seniors and the cost containment," said Sen. Hillary Rodham Clinton (D-N.Y.).
The same day the Senate passed the bill, Sen. Tom Daschle (D-S.D.) introduced legislation to allow the importation of lower-priced drugs from Canada and Western Europe. Also, Medicare would be allowed to negotiate with drug manufacturers for lower prices, and the 2010 demonstration project would be scrapped.
A key provision of the Medicare reform bill would have private health plans administer the drug program, and starting in 2010 traditional Medicare would compete directly with private plans in a pilot program in six metropolitan areas to be named by Thompson.
"It's fair to say only time will tell whether more seniors will go to private plans," said Jorge Lopez, a Washington-based partner at the law firm of Akin Gump Strauss Hauer & Feld. "The history and track record is not very good."
And though the AAHP-HIAA has insisted that private insurers are ready and willing to jump into the program, Larry Goldberg, director of Washington national affairs for the healthcare practice at Deloitte, said it is far from certain that will occur. It will depend, he said, on whether health plans find the changes in payment enough to make it worthwhile to participate in the Medicare program.
But the perceived threat of the increased role of private health plans in the federal program has already led to the reintroduction of a patients' bill of rights. A day before the Senate passed the Medicare bill, Sens. John McCain (R-Ariz.), John Edwards (D-N.C.) and Sen. Ted Kennedy (D-Mass.) introduced the Bipartisan Patient Protection Act of 2003, largely modeled on a bill passed two years ago by the Senate but never acted on by the House.
The bill would let patients see some specialists without prior approval and appeal to a medical expert when their health plan denies coverage. It also would allow patients to sue their health plans.
"While some people in Washington today are trying to push millions of seniors on Medicare into HMOs, it is more important than ever to put healthcare decisions back in the hands of patients and their doctors," said Edwards, a Democratic presidential candidate.
Some also are concerned about the cost of the legislation. The administration has refused to release its own cost estimates. Though the Congressional Budget Office has priced the Medicare reform bill at $395 billion over 10 years, the CBO has had a history of understating Medicare financial projections, and the financial impact of the bill could turn out to be much more than expected, healthcare experts said.
"If history repeats itself, the $395 billion is not going to cover the cost of this program," Goldberg said. "New drugs are going to come out and people are living longer with better quality of life, which alone will increase Medicare outlays," he said.
Among the bill's provider provisions, rural hospitals would receive roughly $25 billion in additional funding over 10 years, and teaching hospitals would get $400 million more in indirect medical education payments. The bill expands the definition of a critical-access hospital and increases their reimbursements. It places an 18-month moratorium on physician referrals to new specialty hospitals in which they own a financial stake.
The bill also directs the General Accounting Office to study whether the list of clinical conditions that qualify for Medicare reimbursement under its "75% rule" for rehabilitation hospitals needs to be updated (Nov. 24 p. 12).
The Medicare reform legislation Congress passed last week contains some of the most sweeping changes ever attempted
to the federal health program. And some of the bill's impact is hidden in details that are only beginning to emerge. From privatization to payment changes and from cost issues to quality implications, Modern Healthcare will explore the intricacies of the Medicare overhaul in a special section of its Dec. 22/29 issue.