December 2, 2010—The leaders of a bipartisan deficit reduction commission appointed by President Obama released a final plan yesterday calling for major changes in federal health policy and tight limits on federal health spending. The 18-member National Commission on Fiscal Responsibility and Reform will vote on the plan Dec. 3.
The report, entitled “The Moment of Truth,” calls for drug manufacturers to provide new rebates on prescription drugs for patients who are dually eligible for Medicare and Medicaid and get their drug coverage through the Medicare Part D program. It estimates that the change would save $7 billion in 2015 and $49 billion through 2020. A draft of the document released in early November called for extending the rebates to drugs for all Part D beneficiaries.
Hard Cap on Health Spending
The document also calls for holding down growth in total federal health care spending beginning in 2020 to the equivalent of gross domestic product (GDP) plus 1 percent and requiring Congress and the President to act if growth exceeds the target. Between now and then, it would freeze all federal discretionary spending in 2012 at its 2011 level or below, and roll back discretionary spending in 2013 to its 2008 level adjusted for inflation. The freeze would apply to the Office of Pharmacy Affairs (OPA), which oversees the 340B drug discount program, its parent agencies, the Health Resources and Services Administration (HRSA) and the Department of Health and Human Services (HHS), and the Centers for Medicare and Medicaid Services (CMS), which administers the Medicaid rebate and Medicare Part D programs.
It is unclear if the report will get the 14 out of 18 votes it needs to be forwarded to Congress. Some panelists who back it have observed there is nothing stopping lawmakers from bringing it to the House and Senate floors for a vote no matter how the commission vote goes.
Other Proposals
Other health care savings recommendations include:
- reforming the so-called Medicare “doc fix” and enacting savings to offset its cost, including the proposed Part D rebate;
- eliminating “state gaming” of the Medicaid program to increase their federal match;
- placing “dual eligibles” in Medicaid managed care;
- reducing Medicaid administrative costs;
- allowing expedited application for Medicaid waivers for “well-qualified” states; and
- giving the new Independent Payment Advisory Board (IPAB) authority to recommend changes in Medicare payment policies for hospitals, which are now beyond its reach.
The final report did not include the draft version’s call for accelerated reductions in disproportionate share hospital (DSH) payments, which are being curtailed under health care reform as more uninsured Americans obtain health coverage. The National Association of Public Hospitals and Health Systems (NAPH) and the American Hospital Association (AHA)both applauded the panel for that decision.
Both groups, however, warned that the report still contains provisions that could jeopardize care for “vulnerable patients and communities.”
Pharmaceutical Research and Manufacturers of America (PhRMA), the trade organization for brand-name drug companies, did not issue a statement on the final report. In earlier remarks on the draft version, it said the proposed Part D rebate amounted to “price controls” and the call to strengthen IPAB would “inhibit seniors’ access to needed care” and stifle innovation.