MEDICARE DRUG COSTS, TITLE VII PROGRAM FUNDING, PHYSICIAN FEE CUTS, DIABETES PREVENTION

Democratic Proposal Requiring DHHS Chief to Negotiate Lower Medicare Prescription Drug Prices Faces Obstacles, Complications

As this issue of Annals of Long-Term Care went to press in mid-January, the House of Representatives was poised to vote on a Democratic proposal that would require the Secretary of the Department of Health and Human Services (DHHS) to negotiate lower Medicare drug prices with pharmaceutical companies.

The proposal—which President Bush and the pharmaceutical industry strongly oppose—would overturn a previous ban on such price negotiations between the Secretary and drug firms. Under 2003 Medicare legislation, only the private insurers that offer Medicare prescription drug plans were authorized to negotiate discounts with drug makers.

If the new proposal is adopted, private insurers will continue to offer Medicare drug plans, and could try to negotiate even lower prices with drug firms after the Secretary negotiates cuts. The insurers would also continue to set their own formularies, because the proposed legislation would not allow the Secretary to establish a standard formulary to determine which drugs the Medicare benefit will and will not cover.

This, however, could make it extremely difficult for the DHHS Secretary to negotiate significant discounts, some argue. “To obtain drugs at low prices, a purchaser must be able to say no to covering a particular drug,” Alan M. Garber, MD, PhD, director of Stanford University’s Center for Health Policy told The New York Times. “If you cannot walk away from a deal, there’s no way you can be sure of obtaining a low price. That’s true whether you are buying a car, a house or medications.”

As Congress Reconvenes, Lawmakers Eye Continuing Resolution That Would Freeze Spending at 2006 Levels, Precluding Restoration of Funds for Title VII Geriatrics Health Professions Programs

With only two of 11 federal spending bills for fiscal year 2007 completed when Congress reconvened in January, lawmakers were also considering issuing a continuing resolution that would freeze funding for the remainder of fiscal year 2007 at FY 2006 levels. The measure would preclude restoration of crucial Title VII funds for Geriatric Health Professions Programs this year. Despite strong bipartisan support, funding for these critical programs was eliminated at the end of 2005.

The American Geriatrics Society, its members, and other advocates of quality healthcare for older adults have been involved in intense advocacy efforts aimed at restoring funds for the programs since these funds were eliminated. In response to news that lawmakers were seriously considering a continuing resolution that would rule out restoration of funding this year, AGS and its members launched yet another advocacy campaign on behalf of the programs, a campaign that was underway when this issue went to press. Title VII funds support the nation’s Geriatric Education Centers (GECs), geriatric faculty fellowships, and Geriatric Academic Career Awards (GACAs). Faced with a second year without federal Title VII funding, GECs and fellowship programs are at risk of closing.

Congress Votes to Block Medicare Physician Fee Cut Just Weeks Before Deadline

Three weeks before a pending 5.1% cut in Medicare physician fees was set to take effect, Congress voted in mid-December to block the cut, approving a proposal that would keep physician pay rates at their 2006 levels. Starting in July, the proposal would also offer a 1.5% bonus to physicians reporting basic quality data.

The 5.1% cut was mandated by Medicare’s controversial Sustainable Growth Rate (SGR) formula, which calls for cuts in Medicare physician fees whenever growth in these expenditures exceeds growth in Gross Domestic Product. Congress can vote to block an SGR-mandated cut, and did so following a concerted advocacy campaign by AGS, its members, and other organizations.

Because the SGR remains in place, Congress may well need to address Medicare payments for physicians again next year.. In March, however, the Medicare Payment Advisory Committee will release a report including recommendations on how to change or replace the SGR. A pay-for-performance program linking reimbursement rates to the quality of care delivered and rising costs, rather than physicians’ costs alone, is a likely component of the committee’s recommendations, according to Congressional Quarterly.

Senators Urge DHHS to Make Diabetes Prevention a Top Priority in FY 2008

With 40% of Medicare beneficiaries believed to have pre-diabetes, members of Congress have asked the DHHS to make diabetes screening and prevention services a top priority next year.

In a December letter, 19 Senators urged the Secretary to include funds for a collaborative effort—involving the Centers for Disease Control and Prevention, Centers for Medicare & Medicaid Services, and other agencies—to identify and screen Medicare beneficiaries with pre-diabetes in his FY 2008 budget proposal.

The letter notes that of the nation’s approximately 35 million Medicare beneficiaries, 61%, or 21 million, have either diabetes or pre-diabetes. An estimated 14 million of the 21 million have not been diagnosed.

National Institutes of Health clinical trial, the Diabetes Prevention Program, found that patients at high risk of diabetes lowered that risk 58% after changing their eating, exercise and other habits. Among trial participants 60 and older, the results were even more impressive. These older adults lowered their risk of developing diabetes 71% by making such changes.