Medicare Aid for Elderly Is Pushed

Having failed to deliver a Medicare prescription drug benefit, lawmakers are searching for other ways to help the nation’s elderly voters shortly before the November congressional elections.

But very little of the sum--up to $50 billion--that the Senate is on course to approve early next month would reach the program’s 40 million beneficiaries. Instead, the so-called givebacks--Medicare fee increases--would go to doctors, hospitals, nursing homes, HMOs and other health-care providers.

Among the potential recipients are overworked physicians in Iowa, air ambulance firms in Montana, HMOs in New York and the collection of state and local medical associations, specialty groups and other health-care professionals that consistently rank among the nation’s top five political contributors.

“No one’s given up on the issue of prescription drugs,” said Michael Siegel, Democratic spokesman for the Senate Finance Committee. “But it would be unfortunate if we sacrificed an opportunity to do Medicare givebacks.”

AARP, the advocacy group for seniors, hasn’t formally surrendered on its No. 1 priority, prescription drug coverage. It has threatened to use the muscle of its 35 million members at the voting booth if Congress does not produce.

But its leaders are realistic.

The givebacks are “so much about home-state politics,” said policy director John Rother. “That often overwhelms bigger issues.”

But as congressional elections approach, lawmakers don’t dare leave seniors empty-handed.

To sweeten the pot, some senators are pushing for a broader “Medicare improvement bill” that would include not only the higher fees but also some new Medicare benefits, such as coverage of oral anti-cancer drugs, nutrition therapy for heart patients and some preventive care.

And Sen. Bob Graham (D-Fla.), looking to save both seniors and taxpayers money, wants to require competitive bidding among companies that rent and sell wheelchairs, oxygen tanks and other medical equipment to Medicare beneficiaries for home use.

“It is critical that any proposal passed out of the Finance Committee strike an appropriate balance between addressing provider payment needs and making needed improvements to the Medicare benefit package,” several senators said Friday in a letter to committee Chairman Max Baucus (D-Mont.) and its top-ranking Republican, Sen. Charles E. Grassley of Iowa.

“To this end,” they added, “we urge the committee to move forward on appropriate Medicare improvements in time to allow this important legislation to be enacted before the November elections.”

If senators find themselves in a preelection bind, they have only themselves--and the closely divided, highly partisan Senate--to blame.

When the Republican-controlled House passed a $310-billion Medicare drug benefit in June, it tacked on some $30 billion in provider givebacks.

But the Senate, deadlocked over both cost and delivery method, failed in three successive tries to approve a benefit that virtually all lawmakers support. It now faces the politically sensitive task of approving a stand-alone bill that offers little for Medicare beneficiaries but meets most of the demands of health-care providers.

While staff members are still hashing out the details, health-care lobbyists and others close to the negotiations described the outlines of a package:

* Physicians, whose fees were cut 5.4% in January in keeping with a years-old formula, could win a fee increase of 2% to 3%;

* Hospitals, especially rural facilities and those affiliated with medical schools, stand to gain at least $14 billion over 10 years;

* Medicare HMOs, which continue to drop out of the program, are likely to receive an additional $3 billion in payments; and

* Nursing homes, which face a 10% fee cut on Oct. 1, and home health agencies, anticipating a 4.9% cut, will probably find those cuts reduced or eliminated.

All these handouts will force lawmakers to revise their rationale, and they already are emphasizing the potential advantages for beneficiaries.

Increasing payments to physicians, hospitals, nursing homes and HMOs “will provide better quality of care and access to care for beneficiaries,” said Siegel, the Baucus aide.

Recent studies show that it is becoming more difficult for Medicare patients to find doctors to treat them. A quarter of physicians told the American Medical Assn. they have already limited or soon will limit the number of Medicare patients they treat. And unless Congress increases Medicare reimbursements, the AMA warned, the problem will only worsen.

For physicians in largely rural states, the connection between Medicare payments, doctor availability and the quality of health care is all too real.

Medicare reimbursement rates vary by region, and for some services the state at the bottom is paid as much as 38% less than the one at the top.

Physicians from 17 states at the lower end of the pay scale formed the Geographic Equity in Medicare Coalition in June and lobbied for a payment formula based on national rather than regional health-care costs.

“It is a fairness issue,” said Dr. Jose Angel, a Des Moines internist and president of the Iowa Medical Society.

Because Iowa ranks 50th in the nation in Medicare reimbursements, Angel said, the state has the 37th-worst ratio of all doctors to patients.

Low payments contribute to the physician shortage because young doctors who learn about the combination of low fees and high patient loads are reluctant to locate in Iowa, Angel said.

The shortage of doctors and hospital beds in turn makes it harder for Iowans to get medical treatment, Angel said.

“Every single day I take care of patients who’ve been driven out of their homes because of health-care costs,” said Angel. “But when someone has to wait six months for a colonoscopy, or three weeks for an angiography or five days to get a gallbladder removed, that’s a problem too.”

So severe is the problem in Iowa that business groups, which complain that companies will not set up shop in a town without a hospital, have joined doctors in demanding change. And Iowa’s representatives in Congress, led by Grassley, are determined to deliver.

“It’s unfair for Medicare to penalize low-cost health-care providers for being low cost,” Grassley said Monday. “That’s what I’m trying to correct.”

While Grassley is likely to add a “payment equity” provision to the Medicare bill, Baucus wants to include a provision that would make it harder for Medicare representatives to deny payment for air ambulance services.

In Montana, where 900,000 residents are spread across the country’s fourth-largest state, an air ambulance can mean the difference between a one-hour plane ride and a six-hour drive. Such differences are particularly critical for patients who have suffered a heart attack or other trauma, said Dr. Nicholas Wolter, CEO of Deaconess Billings Clinic.

Yet Medicare has downgraded 40% of Deaconess’ air ambulance claims in the last 18 months, reimbursing the hospital roughly $400 for flights that cost $4,900 on average, he said.

“The rules and laws made in Baltimore [Medicare headquarters] and Washington are very often at odds with the reality in Montana,” said a Baucus aide.

Physicians, HMO representatives and other health-care providers swarmed over Capitol Hill last week, demanding more money, and some health-care businesses are staging a Washington “fly-in” this week.

There’s nothing unusual about that. But the anti-competitive bidding message medical-equipment providers plan to deliver to Congress on Wednesday is not one lawmakers are accustomed to hearing.

“You have to look at the whole picture before you start saying, ‘Oh, boy, we can save some money,’ ” said Joan Cross, president of the Florida Assn. of Medical Equipment Services.