Medicare drug benefit fight delays physician pay relief

Senate Democrats answer GOP Medicare prescription drug proposal with a plan of their own.

By Markian Hawryluk, AMNews staff. July 1, 2002.

Washington -- Physicians seeking relief from the deep cuts projected in Medicare payment over the next four years must anxiously await resolution of what likely will be a bitter battle over an outpatient prescription drug benefit.

The two issues are entwined in the overall Medicare reform debate. And judging from the initial blows in the prescription drug fight, doctors could be in for a long wait.

Senate Democrats in June introduced a more generous -- but more expensive -- prescription drug benefit than the one House Republicans outlined in May. Democrats charged that the GOP plan would be of little help to seniors, while Republicans blasted a provision in the Senate plan that would require its reauthorization after seven years.

The Democratic plan was introduced by Sen. Bob Graham (D, Fla.) and has the backing of 21 Senate Democrats, including Majority Leader Tom Daschle of South Dakota.

"This will be the largest expansion of the Medicare program since its inception in 1965, and it represents significant reform by shifting the emphasis from treating sickness to promoting wellness," Graham said.

The voluntary prescription drug benefit would rely on private-sector pharmacy benefit managers to negotiate discounts on behalf of enrolled beneficiaries. The measure would set the monthly premium at $25 in the first year, with a $100 deductible and out-of-pocket costs capped at $4,000. The cost-sharing provisions would increase in future years.

The bill would encourage beneficiaries to choose generic drugs by charging tiered co-payments, with generics costing the least, followed by brand-name drugs on the PBM's preferred list and finally non-preferred brand-name medications. Low-income beneficiaries would receive subsidies, and sometimes complete waivers, of cost-sharing provisions. [...]