US Politics: Competitive Bidding - U.S. Senate

US Politics: Competitive Bidding - U.S. Senate

NAAOP

8/2/2002

Competitive Bidding Not Included in Senate Prescription Drug Bill but
could be included in a provider giveback bill later this year

For the past two weeks, the Senate has considered legislation to add
prescription drug benefits to the Medicare program. Unlike the House
legislation, which passed in late June, the Senate legislation does not
contain any form of competitive bidding. The following in an update of
the Senate action on Medicare and prediction for future action this
year.

Prescription drug proposals were debated as amendments to an underlying
bill, S. 812, a generic drug bill that would reform the Hatch-Waxman
drug patent law to eliminate loopholes that allow drug companies to
extend the patent life of their products. Last week, four prescription
drug proposals, a Democratic plan, sponsored by Senator Bob Graham
(D-FL), a Republican plan, introduced by Senator Charles Grassley
(R-IA), a drug discount card plan sponsored by Senator Chuck Hagel
(R-NE), and a tripartisan plan, sponsored by Senators John Breaux
(D-LA), Jim Jeffords (I-VT) and Olympia Snowe (R-ME), all failed to get
the 60 votes required to pass. Despite these failures, Senators worked
throughout last week and over the weekend to find an acceptable
compromise prescription drug package that would gather the requisite 60
votes necessary to waive the application of the Budget Act, a
parliamentary requirement.

Senators Graham and Smith agreed on a compromise package which they
hoped would siphon off enough bipartisan support to pass today as an
amendment to the generic drug bill. Their plan would aid low income
seniors and beneficiaries with disabilities, as well as those with
catastrophic drug costs of over $3,300 annually. It would cover all
drug purchases for those with incomes of up to 200 percent of the
poverty level, and promised a 20-35 percent drug discount, including a 5
percent federal subsidy, for those with incomes over 200 percent of
poverty. Several prominent Democrats such as Ted Kennedy (MA), Zell
Miller (GA) and Jeff Bingaman (NM) endorsed this proposal, as well as
the AARP and a majority of seniors groups. This alternative failed
49-50.

Immediately after the Medicare drug vote, lawmakers passed, by a 78-21
vote, S. 812, the generic drug bill. Included in the final passed bill
are amendments allowing the reimportation of foreign-made drugs and an
amendment giving $9 billion in temporary FMAP funding to states to
assist them in covering their Medicaid costs.

In addition to not including a prescription drug benefit, the final bill
also does not include provider givebacks, and no plans were successful
to include a provider giveback package in any legislation before the
August recess. This is expected to be a legislative vehicle for
competitive bidding.

Senators left Friday for August recess knowing that they will now have
to face angry constituents at home, many of whom viewed passage of a
prescription drug benefit as a top priority. Senate Democrats have
pledged to revisit the issue in the fall, and Majority Leader Tom
Daschle (D-SD) claims that a compromise Medicare prescription drug bill
is still possible before the mid-term elections. The failure of the
Senate to pass a prescription drug bill leaves them unable to conference
with House members, who passed their own prescription drug bill in June.
A provider package is not expected to come out of the Finance Committee
and be debated on the Senate floor before September, at the earliest.
There are powerful forces in the Senate getting ready to do battle on
competitive bidding. Two of the major proponents in the Senate for
competitive bidding are Senators Bob Graham (D-FL) and Tom Harkin
(D-IA). Senator Graham is perhaps the biggest supporter of competitive
bidding as a cost savings mechanism for the Medicare program. The
strength of his commitment to this proposal is puzzling considering the
elderly and disabled population he represents. As for Senator Harkin,
given his strong support of disability issues, it is surprising that he
has latched onto this proposal so aggressively. But both Senators are
absolutely convinced that competitive bidding can work and should be
implemented for this area of the Medicare benefit. On the other hand,
Senator Max Cleland (D-GA), veteran with a severe disability who uses a
wheelchair, has pledged to oppose this proposal in order to defeat
competitive bidding. The political situation in the Senate surrounding
the ultimate passage of some form of competitive bidding is still very
fluid, but signs are beginning to point toward at least a foothold of
opposition to it in that body. NAAOP's own efforts along with those of
other organizations are appearing to have some success in convincing
members of the Senate that competitive bidding will be detrimental to
patient care. Although the Senate has rejected passing a prescription
drug benefit or a provider package over the summer, it is still very
likely that a package of provider givebacks will be passed separately
later this year that will include some form of competitive bidding. It
is essential to make your voice heard with your Senators soon so that
they understand the real impact competitive bidding will have on
patients and on small businesses. Time is running out before
competitive bidding becomes a reality-call your Senator at (202)
224-3121 and weigh in. Better yet, get your patients to weigh in. It's
time to take back your profession.

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