Medicare bill a study in D.C. spoils system Part 3

[Guest guest]

Page 8 of 9 -- They brought along executives from teaching hospitals

in swing states in the presidential election, Pennsylvania and Ohio.

Among their key points: Hospitals had been hit hard by cuts in funding

in 1997, and the money needed to be restored. To set up the White

House meeting, Zane called an acquaintance whom she had met while

serving on the Stonehill College board of trustees, Bush Chief of

Staff Andrew Card. The meeting occurred within days after the phone

call, Zane said.

 

 

" We were constantly putting the pressure on everywhere we could, " said

Dick Knapp, executive vice president for the Association of American

Medical Colleges, who coordinated the lobbying effort. " Once CEOs get

engaged with their senators, it gets there. "

 

Details

 

Lawmakers secured a plethora of smaller expenditures for pet programs,

local reimbursement increases, and home-state demonstrations.

 

Democrat Harry Reid of Nevada, who voted against the bill, pushed for

and won a $200 million construction loan program for cancer institutes

that will benefit an institute that is being built in Las Vegas, a

spokeswoman confirmed. The loans will be forgiven for institutes with

Native American outreach programs, such as the one at the planned

Nevada facility.

 

The Reid spokeswoman, speaking on condition of anonymity, said the

Nevada institute is not alone. In all, 10 to 12 other cancer

institutes around the country will qualify for forgiven loans under

the Native American provision.

 

Alaska doctors, thanks to that state's powerful Republican senator,

Ted Stevens, will receive a 50 percent increase in their reimbursement

rates, worth about $53 million for the first two years. Brian Gavitt,

an aide to Alaska's other Republican senator, Lisa Murkowski,

suggested Alaska's delegation was able to wrest the money for their

doctors because the expected close vote gave them leverage to make

financial demands on Congressional leaders.

 

" They were counting votes, and the Alaska delegation was pretty set on

it, " he said.

 

A $100 million pilot program for placing computerized patient records

systems in doctors' offices emerged in the bill. It said the

demonstrations should be set up in four states, and that " one shall be

in a state with a medical school with a Department of Geriatrics that

manages rural outreach sites and is capable of managing patients with

multiple chronic conditions, one of which is dementia. "

 

Arkansas is the only state that fits that description. The provision

was tailor-made for Democratic Arkansas Senator Blanche Lincoln, a

member of the Senate Finance Committee whose support was crucial to

the Medicare bill's passage. Other states in line to receive money

under the computerization provision are California, Massachusetts, and

Utah.

 

Lincoln declined to comment on the program, a spokesman said.

 

Back-room deals

 

Key members of Congress negotiated details of the Medicare

Prescription Drug Improvement and Modernization Act of 2003 -- as the

415-page bill was called -- behind closed doors in the joint

House-Senate conference committee.

 

Page 9 of 9 -- The committee operated like the proverbial back room,

with heavy-hitting members of Congress determining who got what.

Republicans, led by Thomas from the House and Grassley from the

Senate, controlled the proceedings. In its first weeks of

deliberations in August and September of 2003, Republicans and

Democrats on the committee agreed on many provisions, including

creation of a Medicare drug discount card in 2004 to give seniors

cheaper prescriptions until full drug coverage begins in 2006.

 

 

But they sharply disagreed on critical provisions, including whether

to permit Americans to import prescriptions from abroad and to what

extent private insurance companies should be encouraged to compete

with the government to cover Medicare recipients. As disagreement

grew, the Republicans barred five of the seven Democratic conferees

from the room, including all three House Democrats who had been named

to the panel, and two senators, Minority Leader Tom Daschle of South

Dakota and Jay Rockefeller of West Virginia. That left the lineup on

the committee 10 Republicans and two Democrats. It also cleared the

way for negotiations on one of the most costly and controversial

provisions of the Medicare bill: more money for private health plans.

 

The vast majority of Medicare business is " fee-for-service, " in which

providers like hospitals and physicians are reimbursed by the

government for treatments. The Bush administration wanted to encourage

greater participation by HMOs and preferred-provider organizations, or

PPOs, based on the conviction that private enterprise and competition

would drive down costs. To make that happen, insurance lobbyists

insisted, their reimbursement rates would have to be increased. At the

old Medicare HMO rates, the industry claimed, insurance companies

could not make programs attractive enough for doctors or patients to

participate.

 

To emphasize their message, health insurance companies and lobbying

organizations (now combined under the name America's Health Insurance

Plans) spent $27.8 million lobbying Congress in 2003, according to the

Globe's analysis. They hired lawyers and flew insurance industry

executives to Washington to meet with members of Congress and their

staffs.

 

One part of the effort was a trip by a delegation of health insurance

executives from Massachusetts, who met with Kennedy: Charles D. Baker,

CEO of Harvard Pilgrim Health Care Inc.; Nancy L. Learning, CEO of

Tufts Associated Health Plans Inc.; and Fallon Community Health Plan

CEO Eric H. Schultz.

 

" It was mostly around spending levels and reimbursement, " Baker said.

Baker said he also participated in a second trip to Washington with

insurance executives, providing background information to large groups

of reporters and government officials, including a briefing at the

White House. Learning said the additional money was important to

provide lower premiums for the elderly and higher reimbursements for

doctors.

 

Karen Ignagni, president of America's Health Insurance Plans, declined

to describe details of the association's lobbying effort, other than

to say CEOs of major health plans from around the country met

" one-on-one " with congressional staff and key decision-makers.

 

In the end, the conference committee gave a big boost to Medicare

rates for insurance plans in 2004 and beyond, by an amount now

estimated by the administration to be worth $34 billion over 10 years.

Republicans also added a $12 billion fund for the administration to

offer additional incentives to attract insurance companies to Medicare

in regions where they otherwise would show no interest. Republicans

called it at " stabilization fund. " Democrats led by Kennedy branded it

a " slush fund. "

 

The Republican efforts to enhance Medicare rates for insurance plans

have come at great cost. The Bush administration has identified the

extra money for private health plans as accounting for 23 percent of

the difference between the original $400 billion estimate on the bill

and the $534 billion price tag that was revealed this year.

 

Closed-door deals by the conference committee, Ignani said in a

telephone interview, should not shock anyone.

 

" All the major issues are settled not necessarily in the open forums,

but by leaders in conference committee, when they get together and

decide what they are going to do, " Ignagni said. " It's pretty standard

operating procedure for the Congress. "

 

This report was prepared with the assistance of Marc Shectman of the

Globe library, freelance research manager Maud S. Beelman, and

researchers Kevin Baron and Samiya Edwards. Christopher Rowland can be

reached at crowland.

© Copyright 2004 Globe Newspaper Company.