Congress Edges Closer To Medicare Reform
On August 5 members of the conference committee charged with reconciling the House and Senate versions of Medicare reform bills announced a tentative agreement on a proposal to give beneficiaries special cards that could be used to purchase discounted prescription drugs.
The discount card is expected to be available very soon after final Medicare legislation is passed, but before the actual drug benefit takes effect in 2006.
Lawmakers hope that the discount card will be a tangible benefit they can take home to beneficiaries prior to the November 2004 elections.
Under the agreement, Medicare beneficiaries would purchase drug-discount cards from private companies for a fee of up to $30 per year. The pharmacy benefit managers that would administer the card-based discount would be required to pass on to beneficiaries savings that they derive from negotiating discounts with drug manufacturers.
Beneficiaries with an annual income of less than 135 percent of the federal poverty level—or $12,123 per year for an individual in 2003—would be eligible for an annual subsidy of $600.
“Completing work on the details of the prescription-drug discount card is critical,” said House Ways and Means Committee Chair Bill Thomas (R-Calif.). “The card will provide immediate savings for all seniors on their drug costs, while also delivering nearly $600 a year in additional assistance for low-income seniors.”
Thomas is also chair of the conference committee reconciling the House and Senate bills.
On July 25 the same conferees came to an agreement on Medicare-related regulatory and contracting provisions. The provisions are designed to educate physicians about Medicare’s rules and regulations, improve the process of contracting with insurance companies or other business entities for administrative functions such as claims payments, and clarify physicians’ rights regarding investigations and appeals.
Some key elements in that agreement include the following provisions:
• Creation of a competitive process for contracting for Medicare administrative functions, such as processing and paying of claims, and allowing enterprises other than insurance companies to compete for contracts.
• Requiring prompt responses from contractors to questions from physicians and beneficiaries, including providing toll-free phone lines and written responses within 45 days.
• Allowing physicians up to three years to repay overpayments from Medicare in cases of hardship, and five years in cases of “extreme hardship.”
• Prohibiting Medicare from recovering overpayments to physicians while an appeal is in process until after an evaluation by an independent party.
• Preventing Medicare officials from extrapolating overpayments based on a small sample of claims to a larger number of claims unless they identify a sustained or high level of payment error.
• Requiring written notification to physicians about postpayment audits and making available a full review and explanation of all audits to physicians except where fraud is suspected.
In related news, the U.S. Department of Health and Human Services (HHS) released a departmental analysis of Medicare reform legislation that purports to show that seniors would cut their prescription-drug spending by half under the Senate and House Medicare reform bills.
“We’re on the verge of providing substantial savings in prescription-drug spending to seniors,” HHS Secretary Tommy Thompson said. “Millions of seniors would be better off than they are today. We can’t lose sight of the positive impact modernizing Medicare would have on the health and financial security of seniors. This should provide encouragement for the two houses to come together on a final package that makes these savings a reality.” ▪
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Published online: 5 September 2003
Published in print: September 5, 2003
Notes
Lawmakers trying to reconcile House and Senate Medicare reform legislation agree on contracting provisions that affect physicians, as well as provisions that will give beneficiaries a “drug discount card.”
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