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07/07/95
11:20
002
President Signs Medicare Select Extension Into Law -- Talking Points
Today President Clinton signed into law H.R. 483, a bill to permit "Medicare Select"
policies to be offered to all 50 states. The law will expand choices for Medicare
beneficiaries who wish to purchase this new type of Medicare supplemental "Medigap"
insurance.
Background
Medicare Select polices are the same as Medigap policies (private insurance that fills
in Medicare gaps in coverage -- copayments, deductibles, etc.) except that they only
pay full supplemental benefits if covered services are provided through "preferred
providers."
These policies, currently available through a 15 state Medicare demonstration, are
popular among beneficiaries and insurers because they are frequently cheaper than
traditional Medigap policies. This is due to the fact that insurers offering these plans
can obtain discounts from "select" providers who agree to offer services more cheaply
if they are in a more limited pool of "attractive" providers whose services are 100
percent covered by the plan.
Before H.R. 483 pass the Congress, the Administration took the position that it would
prefer to have the results back from the demonstration study PRIOR to supporting a
50-state expansion. (The final study won't be complete until the end of this year.)
We wanted to make certain that sufficient quality porvisions were in place and that
there were no unexpected costs to the Medicare program itself -- in terms of
increased utilization of services.
Legislative Action and the President's Response
Because of the Select program's popularity, the Congress decided to move ahead and
expand the program without waiting for the report on the 15 state demo program.
Because the President is committed to expanding choices for Medicare beneficiaries,
he decided to go ahead and sign measure into the law.
Wc will be monitoring this program closely in the upcoming years to make certain the
Select option is delivering on its promise of providing a cost-effective, high quality,
and broadly accessible benefit to those Medicare beneficiaries who choose it and the
taxpayers who support the Medicare program. If it does not meet this criteria, the
HHS Secretary has the authority to terminate the program in threc years. If it meets
this criteria, the President and the Congress can and should look back at a bipartisan
legislative achievement that was consistent with one of the President's Medicare
reform priorities: providing more coverage choices to beneficiaries.
EXECUTIVE OFFICE OF THE PRESIDENT
23-Jun-1995 12:00pm
TO:
(See Below)
FROM:
Robert J. Pellicci
Office of Mgmt and Budget, LRD
SUBJECT: Medicare Select Conference Action
House and Senate Conferees agreed yesterday to extend the Medicare
Select program to all States for three years -- June 30, 1998.
The conference agreement retained the requirement that HHS study
the program during this time. The program would become permanent
in 1998 unless the Secretary determines that the demonstration
program was not meeting certain goals -- cost, access, and quality
of care.
The Medicare Select demonstration expires on June 30, 1995.
Distribution:
TO: Nancy-Ann E. Min
TO: Charles S. Konigsberg
TO: Christopher C. Jennings
TO: Diana M. Fortuna
TO: Jennifer L. Klein
CC: Janet R. Forsgren
CC: Mark E. Miller
MEMORANDUM
To:
Gene Sperling
Jennifer Klein
Nancy-Ann Min
Jack Lew
Janet Murguia
From: Chris Jennings
Date: March 7, 1995
Re:
Medicare Materials
Attached you will find 1) the final cleared Administration letter on Medicare Select; 2)
talking points that I believe are consistent with our previous discussions should Bruce
Vladeck be pulled into a conversation on Medicare Extenders during tomorrow's mark-up;
and 3) Qs & As on the Medicare Secondary Payer issue that may come up (our latest
information is that Republicans do not intend on incorporating GAO's recommended changes
during the mark-up, but that a question on it may come up).
I think all of the above materials are fine, but want to make sure that you're all okay with it.
Please call or e-mail me with any comments. Thank you.
SENT BY:Xerox Telecopier 7021 ; 3- 7-95 :12:52PM ;
94567431:# 2
ILLIMAN
DEPARTATE
THE SECRETARY OF HEALTH AND HUMAN SERVICES
WASHINGTON D.C. 20201
USA
March 7,1995
The Honorable Bill Archer
Chairman, Committee on Ways and Means
House of Representatives
Washington, D.C. 20515
Dear Mr. Chairman:
This letter expresses the Administration's views on H.R. 483, as
reported by the Subcommittee on Health. H.R. 483 would make the
Medicare SELECT demonstration program permanent and extend it to
all States.
Our experience with the Medicare SELECT demonstration should be
part of the effort to improve current and future managed care
choices under Medicare. We have previously made available the
case study portion of the Medicare SELECT evaluation. Other
pieces of the evaluation are still in process; these include a
survey of SELECT plan enrollee satisfaction and an analysis of
SELECT enrollee utilization experience. Preliminary results will
not be available until the later part of this summer. We believe
that Congress would benefit from a review of the full evaluation
results before beginning the deliberations on Medicare SELECT as
a permanent program.
The case study portion of the Medicare SELECT evaluation has
already raised a number of questions about the Medicare SELECT
demonstration. As managed care options under Medicare are
expanded, we want to ensure that our beneficiaries are guaranteed
choice and appropriate consumer protections. In addition, many
of the SELECT plans consist solely of discounting arrangements to
hospitals. We would be concerned if the discounting arrangements
under Medicare SELECT were to be expanded to Medicare
Supplementary Insurance (part B) services. Discounting
arrangements, particularly for part B services, may spur
providers to compensate for lost revenues through increased
service volume. Consequently, we are concerned that such an
expansion would lead to increased utilization of part B services,
rather than contribute to the efficiency of the Medicare program
through managed care. We would therefore oppose such a change.
SENT BY:Xerox Telecopier 7021 ; 3- 7-95 12:53PM ;
94567431;# 3
Page 2 - The Honorable Bill Archer
Given that the Medicare SELECT demonstration is under an expiring
authority with an impending deadline, the Administration supports
a temporary extension of the 15-State demonstration. Such an
extension would provide sufficient time to examine what we have
learned from the demonstration and to make needed changes to
SELECT based on our findings.
We are committed to working with the Congress to improve and
extend the available choices to Medicare beneficiaries so that
they have the full range of managed care options enjoyed by the
general insured population.
We are advised by the Office of Management and Budget that there
is no objection to the presentation of this report from the
standpoint of the Administration? B program.
Sincerely
Draw
94567431:# 2
SENT BY:Xerox Telecopier 7021 : 3- 6-95 : 7:36PM ;
Extending Current Medicare Policies
The President's FY 1996 budget proposes to extend four
current law Medicare provisions.
+
The budget contains no new Medicare savings proposals.
These extenders are provisions that are in effect now but
are scheduled to expire unless they are extended.
+
Without extension, there will be an upward spike in the
Medicare spending baseline.
These extenders do help reduce Medicare spending. But they
are not new Medicare cuts; rather these are policies that
are currently part of the Medicare program.
+
Inclusion of these extender provisions in the budget
will lower the projected FY96 outlays by $140 million,
and the total FY96 through FY2000 outlays by $9.8 bill.
The President does not intend to propose any new Medicare
savings proposals outside the context of health care reform.
+
We are concerned that new Medicare cuts outside of
health care reform will impose new costs on
beneficiaries and/or reduce provider payments inducing
them to refuse to take Medicare beneficiaries, both
without providing additional health security to those
on Medicare.
The President's budget uses the savings from the Medicare
extenders for deficit reduction and explicitly not to
finance the President's middle-class tax cut.
+
The Administration's proposed tax cuts of $63.3 billion
from 1996 - 2000 are financed by $80.5 billion in
reductions to discretionary programs. In addition,
$26.2 billion in savings from the second phase of
reinventing government, $37.4 billion from mandatory
programs, as well as other initiatives will produce
another $80.6 billion in deficit savings over the next
five years.
Specifically, the extenders cover:
+
Medicare Secondary Payor protections which allow the
Medicare program to collect payments from primary
insurance sources. These expire after FY 1998.
+
A provision that maintains the Part B premium at 25
percent of program costs. This expires after 1998.
SENT BY:Xerox Telecopier 7021 ; 3- 6-95 ; 7:36PM :
94567431:# 3
page 2
extending current Medicare policies
+
A provision that makes permanent the savings from a
two-year temporary freeze on payments for skilled
nursing facilities (just like all other freezes in
Medicare have worked). This expires after FY95.
+
A similar provision with regard to home health
services.
SENT BY Xerox Telecopier 7021 ; 3- 6-95 ; 7:37PM ;
94567431;# 4
MSP COURT DECISION
QUESTION:
on February 23, the GAO testified before the Ways and Means
Health Subcommittee that a recent decision by the Federal Appeals
Court would have the effect of limiting recoveries for mistaken
payments by Medicare for services for which Medicare should have
been the secondary payer. This decision was allowed to stand by
the Supreme Court, which decided not to hear the case. The
decision would limit recoveries of mistaken payments under the
Medicare Secondary Payer (MSP) Data Match project. GAO testified
that the Committee needed to modify the law to permit recoveries
to be achieved, as projected under the provisions when they were
enacted. Does the Administration have a position on this issue?
ANSWER:
O
The Administration believes, in light of the recent Supreme
Count's action, that changes in the law may be necessary to
permit these recoveries and secure the savings for the
Medicare program that Congress originally intended.
O
However, the matter is complex and since the Supreme Court's
decision was only handed down recently we are still
analyzing what changes are necessary to achieve this end.
Therefore, we are not prepared to take a position at this
time.
BACKGROUND:
The Court's decision would affect two aspects of the recovery
process.
o
First, it would require Medicare to comply with "timely
filing" requirements imposed by the insurers on other
claimants. This would restrict the amount of time allowed
for Medicare to file for recoveries.
Second, it would not permit Medicare to file claims for
recoveries with "third party administrators" (TPAs), which
administer self-insured plans for employers. This would
require Medicare to seek recoveries directly from employers,
a much less efficient process.
ILIMAN
DEPARTMENT
THE SECRETARY OF HEALTH AND HUMAN SERVICES
SERVICE
WASHINGTON DC. 20201
USA
March 7, 1995
The Honorable Bill Archer
Chairman, Committee on Ways and Means
House of Representatives
Washington, D.C. 20515
Dear Mr. Chairman:
This letter expresses the Administration's views on H.R. 483, as
reported by the Subcommittee on Health. H.R. 483 would make the
Medicare SELECT demonstration program permanent and extend it to
all States.
Our experience with the Medicare SELECT demonstration should be
part of the effort to improve current and future managed care
choices under Medicare. We have previously made available the
case study portion of the Medicare SELECT evaluation. Other
pieces of the evaluation are still in process; these include a
survey of SELECT plan enrollee satisfaction and an analysis of
SELECT enrollee utilization experience. Preliminary results will
not be available until the later part of this summer. We believe
that Congress would benefit from a review of the full evaluation
results before beginning the deliberations on Medicare SELECT as
a permanent program.
The case study portion of the Medicare SELECT evaluation has
already raised a number of questions about the Medicare SELECT
demonstration. As managed care options under Medicare are
expanded, we want to ensure that our beneficiaries are guaranteed
choice and appropriate consumer protections. In addition, many
of the SELECT plans consist solely of discounting arrangements to
hospitals. We would be concerned if the discounting arrangements
under Medicare SELECT were to be expanded to Medicare
Supplementary Insurance (part B) services. Discounting
arrangements, particularly for part B services, may spur
providers to compensate for lost revenues through increased
service volume. Consequently, we are concerned that such an
expansion would lead to increased utilization of part B services,
rather than contribute to the efficiency of the Medicare program
through managed care. We would therefore oppose such a change.
Page 2 - The Honorable Bill Archer
Given that the Medicare SELECT demonstration is under an expiring
authority with an impending deadline, the Administration supports
a temporary extension of the 15-State demonstration. Such an
extension would provide sufficient time to examine what we have
learned from the demonstration and to make needed changes to
SELECT based on our findings.
We are committed to working with the Congress to improve and
extend the available choices to Medicare beneficiaries so that
they have the full range of managed care options enjoyed by the
general insured population.
We are advised by the Office of Management and Budget that there
is no objection to the presentation of this report from the
standpoint of the Administration's program.
Draw
MAY-17-95 01:33 FROM:OMB LA
ID:
PAGE 2/4
Draft--NOT CLEARED FOR TRANSMITTAL
May , 1995
(Senate)
H.R. 483, A Bill to Permit Medicare Select Policies
to be Offered in All States
The Administration supports a temporary extension of the
15-State Medicare SELECT demonstration program. However, the
Administration has concerns about H.R. 483, in its present form,
for the reasons stated in the attached letter from Secretary
Shalala. The Administration looks forward to working with the
Congress on this matter.
*******
MAY-17-95 01:33 FROM:OMB LA
ID:
PAGE
3/4
#
59
File
1111 CRI TARY or 111 AI in AND HUMAN X RVICES
OF
WASHING 100, DC. 20301
March 7,1995
The Honorable Bill Archer
Chairman, Committee on Ways and Means
House of Representatives
Washington, D.C. 20515
Dear Mr. Chairman:
This letter expresses the Administration's views on H.R. 483, as
reported by the Subcommittee on Health. H.R. 483 would make the
Medicare SELECT demonstration program permanent and extend it to
all States.
Our experience with the Medicare SELECT demonstration should be
part of the effort to improve current and future managed care
choices under Medicare. We have previously made available the
case study portion of the Medicare SELECT evaluation. Other
pieces of the evaluation are still in process; these include a
survey of SELECT plan enrollee satisfaction and an analysis of
SELECT enrollee utilization experience. Preliminary results will
not be available until the later part of this summer. We believe
that Congress would benefit from a review of the full evaluation
results before beginning the deliberations on Medicare SELECT as
a permanent program.
The case study portion of the Medicare SELECT evaluation has
already raised a number of questions about the Medicare SELECT
demonstration. As managed care options under Medicare are
expanded, we want to ensure that our beneficiaries are guaranteed
choice and appropriate consumer protections. In addition, many
of the SELECT plans consist solely of discounting arrangements to
hospitals. We would be concerned if the discounting arrangements
under Medicare SELECT were to be expanded to Medicare
Supplementary Insurance (part B) services. Discounting
arrangements, particularly for part B services, may spur
providers to compensate for lost revenues through increased
service volume. Consequently, we are concerned that such an
expansion would lead to increased utilization of part B services,
rather than contribute to the efficiency of the Medicare program
through managed care. We would therefore oppose such a change.
MAY-17-95 01:34 FROM OMB LA
ID:
PAGE 4/4
Page 2 - The Honorable Bill Archer
Given that the Medicare SELECT demonstration is under an expiring
authority with an impending deadline, the Administration supports
a temporary extension of the 15-State demonstration. Such an
extension would provide sufficient time to examine what we have
learned from the demonstration and to make needed changes to
SELECT based on our findings.
We are committed to working with the Congress to improve and
extend the available choices to Medicare beneficiaries so that
they have the full range of managed care options enjoyed by the
general insured population.
We are advised by the Office of Management and Budget that there
is no objection to the presentation of this report from the
standpoint of the Administration's program.
Sincerely
Donna E. Shalaia