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.