Medicare battle brewing on Capitol Hill

An Obama administration proposal aimed at fighting high drug prices is facing a backlash on Capitol Hill. 

Republicans say the pilot program that would change how Medicare pays for certain drugs should be scrapped, while congressional Democrats are expressing serious concerns and seeking changes, but generally do not want to terminate it completely.

{mosads}Rep. Larry Bucshon (R-Ind.) told The Hill that he plans to introduce a bill on Friday that would block the program; he expects some Democrats to support it. 

At issue is a five-year pilot program that would change the way Medicare Part B pays for drugs. 

Currently, Medicare pays doctors the average price of a drug plus 6 percent. The administration warns that system gives doctors an incentive to prescribe higher cost drugs so that they get paid more. The pilot program would reduce the 6 percent add-on to 2.5 percent plus a flat fee of about $16. 

So far, the proposal is finding little support in Congress. Every Democratic senator on the Senate Finance Committee joined a letter to the administration on Thursday calling for changes to the program before it moves forward. 

The Finance Committee Democrats warned that the program could harm patients by limiting their access to treatments if doctors’ costs to acquire drugs become higher than the reimbursement rate for Medicare. 

House Democrats, led by Rep. Richard Neal (D-Mass.), are circulating a similar letter that expresses 11 different concerns with the effort, including about patient access to drugs, the impact on rural doctors, and a shortage of stakeholder input. That letter was first reported by the Huffington Post. 

“We strongly urge the Administration to address these concerns before moving forward with the Part B model,” the House Democratic letter states. 

“CMS is proposing significant and complex changes to an integral part of the Part B program and did so with no input from the Congress,” the letter adds, referring to the Centers for Medicare and Medicaid Services.

Democratic leadership is working to have their members sign the letter expressing concerns, rather than sign the Republican letter that calls for completely ending the program, according to a Democratic lobbyist.

Drew Hammill, a spokesman for House Democratic Leader Nancy Pelosi (D-Calif.), said that House Democrats are not trying to slow down or kill the rule, but instead change it to make it more resilient. 

“Members are outlining their concerns but this letter is in furtherance of getting an effective rule in place under the current timeline,” Hammill said. “This [in] no way is an effort to slow down or undermine the administration’s efforts.” 

He added that the House Democratic letter “is going to make this rule stronger, more effective and harder for Republicans and special interests to attack it.”

Meanwhile, Republicans in both the House and Senate are calling for the program to be abandoned, and hoping to get Democrats onboard with the push.

Bucshon said he plans to introduce a bill on Friday that would scrap the initiative. Asked if any Democrats supported it, Bucshon said, “Oh yeah, we’re going to have some Democrat support.” He declined to say how many lawmakers had signed on so far. 

Despite the concern from Democrats, the Department of Health and Human Services is defending the program and signaling it will go forward.

“The administration’s Part B proposal seeks to deliver better value for consumers and Medicare, while ensuring that doctors and patients continue to have access to life-saving drugs,” said HHS spokesman Ben Wakana. “That’s why the proposal enjoys support from a diverse set of voices — from AARP to the American Academy of Family Physicians to the former head of the Centers for Medicare and Medicaid Services under George W. Bush.”

Some powerful interest groups are strongly against the proposal and are pressuring Congress to act.

The Pharmaceutical Research and Manufacturers of America (PhRMA) has denounced the plan, as have some medical provider groups, like the association representing cancer doctors. 

“That certainly has to be a concern,” KJ Hertz, senior legislative representative at AARP, said of the PhRMA and provider group lobbying. “They’re putting a lot of pressure on members of Congress as well as the administration.”

AARP is a prominent supporter of the proposed program, noting that last year Medicare Part B spent $22 billion on drugs, double the amount in 2007, which it calls “simply unsustainable.” 

The administration says that it will hear stakeholder feedback before finalizing the new initiative, which could come sometime this summer. 

A Democratic lobbyist said possibilities for changes to address concerns include a rural add-on payment to help doctors in rural areas. 

Hertz noted that the program is not a permanent change, but rather a five-year program intended to test the effects of changes. 

“The U.S. healthcare system is really going to be in trouble if CMS can’t even test out ways to hold down spending on prescription drugs,” he said.