A $10 billion congressional package designed to provide broad-based emergency relief to health care providers who say they were hurt unfairly by prior Medicare cuts has become a vehicle for special concessions for some interest groups.
The nursing home industry, for example, persuaded Senate Finance Committee members to include $800 million in extra aid for some patients, though an administration watchdog questioned the need for the new cash. An Alabama company that owns rehabilitation hospitals won a provision in the House bill that passed Friday that would let it move quickly to a new Medicare payment schedule.
Providers of home oxygen and other medical equipment succeeded in getting language in both bills temporarily blocking regulators' authority to cut their rates. And drug and medical device makers worked to get several hundred million dollars of hospital outpatient payments set aside to pay for expensive new drugs and therapies. They did so even though administration officials said the provision is so complex it would delay another requirement, and cost Medicare beneficiaries an estimated $1.4 billion in higher outpatient copayments.
Attempts to win special favors late in a session of Congress are not uncommon. But the evolution of the pending Medicare bills shows how lobbyists, and lawmakers, can prevail when they master the details behind terms like RUGs (a type of payment) for SNFs (skilled nursing facilities), "inherent reasonableness" regulations, and other arcana of the highly regulated health care industry. It also demonstrates the difficulty Congress has judging the validity of needs when objective evidence is scarce.
The Clinton administration agrees that Medicare providers need more money to fix "unintended consequences" of payment reductions made by the Balanced Budget Act of 1997. But officials say it is unclear that the distress cited by some providers was caused by the cuts or other factors, such as unrelated business decisions or a crackdown on fraud and abuse.
Budget director Jacob "Jack" Lew said in a letter Friday, for instance, that giving extra billions to managed-care plans is "unwarranted" because studies show they are overpaid now.
"Whenever you have a vehicle moving through Congress it becomes a target for people to try to attach relief, whether warranted or not, for their particular industry or group," said Martin Corry, a lobbyist for AARP, whose members are age 50 and older. He said he didn't think the bills so far are too weighed down by special-interest items.
Rep. Bill Thomas (R-Calif.), chief sponsor of the House bill that passed 388-25, said members and interest groups alike are adept at saying "More, please," as Oliver Twist said about his empty bowl of porridge. "It's the way the place [Congress] is," he said.
Thomas said policy, not lobbyists' arguments, was the basis for his bill. "We don't write rifle shots," he said, in reference to the practice of including narrow provisions that apply only to one company or facility.
The Senate bill has several provisions providing special favors to particular entities. Two Mississippi hospitals are mentioned by name, as are counties in North Carolina and New York. Another provision, though it doesn't mention a facility by name, was requested by Sen. Carl M. Levin (D-Mich.) to help a nursing home in Flint, Mich., that couldn't get what it wanted from federal regulators.
Many Medicare provider groups have lobbied aggressively for several months, claiming the cuts in their payments mandated in the 1997 act were too severe. The home oxygen, hospital and nursing home industries generated studies to try to convince Congress of the need for more money.
The American Health Care Association, a nursing home trade group, for example, has run extensive television commercials, taken out a full-page ad in The Washington Post and sent a letter to every member of Congress in the past week citing bankruptcies by major companies and extolling the Senate bill's solution to its problems.
Haley Barbour, a former Republican National Committee chairman hired to lobby for nursing home companies, said he has written memos to Thomas trying to convince him the Senate bill is better. He and Linda Keegan, AHCA executive vice president, said money for rehab services is needed because many patients who need rehab also have other serious problems that are expensive to treat.
The inspector general of the Department of Health and Human Services said a recent survey showed that it was getting easier, not harder, to place patients needing rehabilitation services in nursing homes.
HealthSouth Corp., a Birmingham company that is the largest owner of rehab hospitals, worked through its for-profit trade group over the last few weeks to get permission to bill for its services at a new rate right away, instead of having the increase phased in over a few years. Some rehab hospitals object, fearing the Health Care Financing Administration (HCFA), which administers Medicare, would cut their payments.
Rep. Fortney "Pete" Stark (D-Calif.), the ranking Democrat on the Ways and Means health subcommittee, called the provision a "windfall" for HealthSouth. Thomas said he saw no harm in the provision because it isn't supposed to cost the government more.
It was also over the past few weeks that representatives of the pharmaceutical, medical device and hospital industries met at Thomas's suggestion and agreed to set aside a small part of the estimated $17 billion in hospital outpatient fees to pay for expensive new therapies. Drug lobbyists then worked to get references to their company's creations in the bills.
Home oxygen and other equipment suppliers were successful in their top priority, getting language in both bills barring HCFA from making further cuts in their rates. Sen. Tom Harkin (D-Iowa), who put the so-called "inherent reasonableness" power in the 1997 law, says the ban would block more than $500 million in savings on overpriced products. A home oxygen lobbyist, who asked not to be named, said the home equipment industry objected because HCFA agents were imposing the cuts without due process.
Rep. Benjamin L. Cardin (D-Md.), a member of the House Ways and Means Committee, says Thomas has controlled the size of the House bill and the impact of the lobbyists. There are now only a few special interest "ornaments" on the House bill, he said.
But he fears that in this week's rush to adjourn Congress for the year, negotiators will bow to pressure and insert more money for the interest groups. "By Wednesday we'll be giving everyone everything," Cardin predicted. "It will become a Christmas tree."