Medicare bill more than just a ‘doc fix’

Almost lost amid the donnybrook between physicians and health insurers over Medicare is how many other healthcare sectors scored wins in the Medicare bill that passed this month.

The nearly annual ritual of addressing physician payments under Medicare is a magnet for a plethora of special interests with a stake in the program.

{mosads}The “doc fix” bill also serves as a vehicle for Congress’s routine maintenance of the $440 billion program.

Medicare’s administered pricing system for medical services and equipment is regularly tweaked by lawmakers, usually at the behest of provider lobbies that complain they are not being fairly compensated and caution that inadequate pay rates will result in loss of beneficiary access to their services.

As this year’s debate demonstrated, too, giving many healthcare sectors an interest in passing the bill can help congressional leaders tip the scales in their favor.

The main event in the lobbying fight clearly has been the American Medical Association (AMA), other physician groups and the AARP versus America’s Health Insurance Plans (AHIP) and its members. Democrats opted to offset the cost of undoing a 10.6 percent cut in physician fees this year by reducing spending on private Medicare Advantage insurance plans by as much as $14 billion over five years.

The Senate passed the bill on July 9, 69-30, and the House passed it June 24, 355-59. Despite the fact that President Bush vetoed the bill Tuesday, the House voted to override the veto, 383 to 41, sending the bill to the Senate for final action. The Senate was poised to vote on the override Tuesday evening. Barring a collapse of support in the upper chamber, the measure would become law this week.

Although the lobbying pressure exerted by the AMA, the AARP and their allies might have been enough to counterbalance the efforts of the insurance industry, they had plenty of help from other camps with their own self-interests.

Perhaps the biggest winners, other than physicians, are the manufacturers and suppliers of durable medical equipment (DME). The Medicare bill includes a delay in the implementation of a competitive bidding program that most of the DME industry opposed, led by the American Association for Homecare and companies like Invacare and American HomePatient that make or sell oxygen tanks, wheelchairs, diabetes test strips and other supplies.

These companies launched an aggressive and successful lobbying campaign that eventually won support from most lawmakers to halt the bidding program. The oxygen tank manufacturers also convinced Congress to undo a 2005 law that gives beneficiaries ownership of their rented equipment after 36 months and restores the rental benefit.

The drugstore industry won some long-sought-after provisions in the legislation. Senate passage prompted praise from the National Association of Chain Drug Stores (NACDS). “NACDS believes strongly that this legislation as a whole is necessary for the good of healthcare and for the good of the economy,” said Steven Anderson, the group’s president and CEO.

NACDS, the National Community Pharmacists Association (NCPA) and the American Pharmacists Association have been lobbying for changes to the Medicare Part D prescription-drug benefit since its 2006 launch, chiefly for a requirement that drug plans pay pharmacies for the medicines they dispense within 14 days.

This year’s Medicare bill also contains provisions to delay the implementation of a change to the Medicaid drug pricing formula, called “Average Manufacturer Price,” opposed by pharmacies.

The drugstore lobby’s main rival, the pharmacy benefit management (PBM) industry, strongly opposed the “prompt pay” requirement. Nevertheless, the sector’s trade group, the Pharmaceutical Care Management Association (PCMA), found plenty to like in the Medicare bill and even plenty in common with the pharmacies.

The PCMA and the drugstores favor provisions that would provide financial incentives for physicians to use electronic prescriptions. PCMA was a driving force behind coalescing support in Congress for the e-prescribing legislation. This information technology upgrade saves money for both sides of the transaction. In addition, the NACDS and the NCPA jointly own SureScripts-RxHub, the largest e-prescribing network in the nation, with the three biggest PBM companies.

The PCMA also supports the postponement of the Medicaid drug pricing changes, as does the Generic Pharmaceutical Association and the Healthcare Distribution Management Association , which represents companies like Cardinal Health and AmerisourceBergen that distribute pharmaceutical products to pharmacies.

PBMs, insurers, business groups and SureScripts-RxHub , though, are among the camps that oppose provisions in the bill that would expand the government’s authority to require that certain drugs be covered by Part D plans.

Other healthcare lobbies won concessions from Congress in the bill.

Physical, occupational and speech therapists were pleased to see an extension of a process through which beneficiaries can be exempted from annual caps on therapy services.

Private laboratories were awarded a reprieve to a competitive bidding program they opposed. “This is a great day for laboratories and the Medicare beneficiaries who rely on critically important laboratory services,” Alan Mertz, president of the American Clinical Laboratory Association , said.

The bill puts kidney dialysis facilities on track for higher fees, too, by making changes to how Medicare calculates payments for end-stage renal disease treatments.

The measure also sets new requirements for coverage of mental health services by Medicare. In advance of a pending bill mandating that health insurance companies in the private sector cover certain mental health treatments, the Medicare bill lowers co-payments for mental healthcare in the federal program.