As Congress prepared to leave Washington for its Memorial Day recess, consideration of Medicare reform -- including a prescription drug coverage benefit -- was placed on hold. Instead, members of both chambers focused on the president's tax package. A compromise $350 billion tax cut plan passed. It included funds for cash-strapped states -- approximately $20 billion for Medicaid and a variety of block grant programs. Massachusetts could gain as much as $300 million in new support that could be used to offset projected state budget cuts.

When Congress returns, it will likely focus on the passage of a Medicare prescription drug benefit. While all parties call for a benefit, the debate centers around how much coverage the federal government can afford and whether the federal government should provide the same benefit for all Medicare beneficiaries, regardless of which Medicare product they choose. The Massachusetts Medical Society's policy calls for prescription drug coverage that is offered as a basic Medicare benefit.

While 88 percent of Medicare beneficiaries are currently in the traditional fee-for-service program, the Bush administration continues to support proposals that encourage Medicare beneficiaries to enroll in private or Medicare+Choice products by offering more generous drug benefits. On the opposing side, most Democrats support a drug benefit that is comprehensive and uniform for all Medicare beneficiaries. They argue that Medicare+Choice products have not been successful in many regions of the country and that they are neither universally available nor uniform in their benefit packages.

Opponents of the administration's approach also note that such a plan would not help reduce the price of pharmaceuticals, since private plans could merely offset their costs by reducing payments to providers and other groups with whom they contract.

On a related noted, the Centers for Medicare and Medicaid Services (CMS) project that 2004 physician Medicare payments will decrease by 4.2. Many believe that this issue will be extremely difficult to resolve, as physicians were the only group earlier this year to receive additional Medicare funds in 2003, totaling $54 billion over 10 years. In addition, there is growing political urgency to provide a Medicare prescription drug benefit within a grossly inadequate budget.

While the CMS projected fee cut is an early estimate, the MMS and AMA are very concerned, and MMS officers will be meeting with the Massachusetts Congressional Delegation to discuss this and other Medicare-related issues affecting patients, physicians and the health care provider community.

- Alex. Calcagno