Medicare Conferees Agree on Some Basics

Published September 1, 2003

Members of the conference committee charged with reconciling the House and Senate versions of Medicare reform legislation have reached agreement on some relatively uncontroversial and basic provisions.

The provisions would clarify the rights of Medicare beneficiaries and doctors, hospitals, and other providers. The clarifications are intended to make less necessary micro-managing regulation by the federal government, while allowing federal prosecutors enough latitude to investigate fraud.

Conference committee Chair Bill Thomas (R-California) said, “Physicians are spending too much time struggling with paperwork and not enough time on patient care.”

The provisions on which agreement has been reached would:

  • Create an ombudsman for Medicare beneficiaries.
  • Move Medicare administrative law judges from under the Social Security Administration to under the authority of the Department of Health and Human Services.
  • Establish a toll-free hotline beneficiaries could use to obtain answers to questions about Medicare.
  • Reform the appeals process to simplify appealing Medicare’s denial of a claim.
  • Streamline the process for reviewing doctors’ billing records.
  • Simplify the process by which doctors correct billing mistakes, appeal actions against them, and repay Medicare when they over-bill the program.
  • Generally exempt doctors from penalties if they can prove they violated Medicare rules because their actions were based on false written advice from the government.
  • Generally prohibit Medicare officials from applying new interpretations of rules retroactively.
  • Prevent Medicare officials from assessing large penalties against hospitals by extrapolating the number of errors a hospital has committed based on a small sample of Medicare claims.

Conference committee member Representative Nancy Johnson (R-Connecticut) said “the provisions will have as much impact on people’s lives as any [other] section of the [final] bill.”

Senator Charles Grassley (R-Iowa) said the final Medicare reform bill would not hinder fraud investigations, but will “preserve the integrity of the False Claims Act, a very potent weapon in the war against [Medicare] fraud.”

Room for Negotiation?

House and Senate negotiators appeared to feel good about finishing a portion of the final reform bill before leaving for Congress’ August recess, suggesting the agreement could prompt further bipartisan compromises on more contentious provisions.

Representative Billy Tauzin (R-Louisiana) stated in an Associated Press interview, “This is perhaps the low-hanging fruit of this legislation, but it does represent a huge accomplishment.” Senate Majority Leader Bill Frist (R-Tennessee) agreed, promising, “Already, we have been able to bridge dozens of differences over the course of one week since the conferees’ meeting July 15. There is much more to do. And, in the weeks ahead, we will do what is necessary to reach agreement in all areas.”

The New York Times, however, reported lingering animosity between the parties, noting Representative Charles Rangel (D-New York) “half-facetiously” said he hoped Republicans would at least inform Democrats where and when meetings on the “big decisions” ahead would occur.

Conferees have adopted an ambitious schedule, requiring staff members to work through the August break to meet the Bush administration’s request to finish work on a final reform bill this year.

Much More To Be Done

Populated by leaders of both houses, the conference committee has yet to tackle disagreements over the heart of Medicare reform: the language that will provide prescription drug benefits for senior citizens.

The Congressional Budget Office estimates the prescription drug benefits outlined in both versions of the Medicare reform drug bill would cost more than $400 billion over the next 10 years. That 10-year cost, moreover, is only the beginning.

Since prescription drug coverage would be a new entitlement under Medicare, notes Jeff Lemieux of the Progressive Policy Institute, “the cost impact of these bills is more than a one-time bump. It is a permanent acceleration of spending growth.”

Conrad F. Meier is managing editor of Health Care News. His email address is [email protected].