Slow going on Medicare drug bill, update fix

Final legislation from the House and Senate may not be ready until November.

By Markian Hawryluk, amednews staff. Sept. 22/29, 2003.

Washington -- Congressional negotiators working on a Medicare reform bill that would establish an outpatient prescription drug benefit and address physician payment problems reached consensus on several issues over the summer. But lawmakers have left the heavy lifting for the fall.

According to Republican congressional staff, the conference committee working to reconcile House and Senate versions had completed about a third of the bill by the start of September. The panel made progress on regulatory reform and the drug discount card that would be offered to beneficiaries until the drug benefit begins.

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Topic: Medicare payment

But conferees still differ significantly over physician issues. The House bill would set the physician update at no less than 1.5% for 2004, avoiding a 4.2% cut that will otherwise go into effect in January. The House bill also would help narrow the gap in Medicare payments between urban and rural physicians.

The Senate bill would not provide an overall update fix but includes greater payment equity for rural physicians. The differences caused a disruption in proceedings for several days when Sen. Charles Grassley (R, Iowa) pulled his staff from negotiations to protest the lack of discussion of rural payment issues. GOP staff said rural physician payment would be discussed at committee meetings in September.

The AMA urged adoption of the physician update fix and provisions relating to rural payment disparity. In a letter to the negotiators, the group also expressed concern over mandates on electronic prescribing, coding systems, and potential cuts for specialty hospitals and ambulatory surgical centers.

Congress appears to be headed for contentious debate over the amount of market competition integrated into the drug benefit and Medicare. Fiscal conservatives have criticized the reform bills for adding significant budget obligations and are pushing for reforms they hope will limit spending down the road.

Consumer advocates, however, criticized the bills as insufficient and have decried the gap in drug coverage that beneficiaries would face before reaching a spending cap. At press time, Democratic congressional staff pegged the chances of passage at about 50-50, while Republicans were somewhat more optimistic. None expected resolution before November.