PROPOSAL TO SLASH MEDICARE/MEDICAID COSTS LIKELY TO FAIL, SOURCE SAYS
An effort by Senate Finance Committee Chairman Chuck Grassley (R-Iowa) to reduce
the federal budget by cutting up to $25 billion from the Medicare and Medicaid
programs will likely fail because of Republican committee members' concerns
with spending increases for doctor reimbursement and an expansion of Medicaid
coverage, a source close to the negotiations says.
Grassley's proposal for $25 billion in cuts to Medicare and Medicaid over the next five years will likely be marked up Oct. 25. This effort includes prescription drug payment reforms and changes to drug rebate rates under Medicaid, and instituting so-called pay-for-performance plans under Medicare.
According to the Chairman's Mark, the plan "achieves significant budget savings, slashes wasteful spending, and targets resources to preserve program integrity." But a consultant that has conferred with committee members said Grassley will not receive the support of Republicans on the committee.
Because Democrats oppose the proposed cuts, Grassely would have to get all 11 Republicans on the committee to support the plan, the source said. But Republican committee members, including Sen. Jim Bunning (R-Ky.), are reportedly not going to support the language because of certain funding increases.
For example, Bunning is balking at an increase in rates that physicians are reimbursed for handling Medicare claims, the source said. Under the current budget, doctors would face a 4.4 percent reduction in reimbursement rates. Grassley's proposal would provide $10.8 billion to instead have a 1 percent increase.
And many conservatives are critical of Grassley's plan to allow families whose income exceeds limits for Medicaid to qualify for the plan if they have children with disabilities. According to the source, this proposal would cost approximately $800 million over the next five years and $6 billion over the next 10 years.
Staffers in Grassley's and Bunning's offices could not be reached for comment.
The plan is also under fire from the pharmaceutical industry. PhRMA argues in a recent press release that spending cuts to federal prescription drug plans could do more harm than good. "As Congress continues to find ways to trim Medicaid, we would urge them to consider that prescription medicines make up just over 10 cents of the healthcare dollar and that the appropriate and timely use of prescription medicines may prevent more expensive both in human and economic terms medical treatments such as surgeries and in-patient care," the group said.