SGR repeal, health care cuts among ideas sent to super committee

Congressional committees had until Oct. 14 to submit suggestions, which included drug rebates and Medicaid block grants, to reduce the nation's deficit.

By Doug Trapp — Posted Oct. 24, 2011

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Leading congressional lawmakers advised a debt reduction committee to enact a mix of health care cuts, including tighter prescription drug spending, but maintain many existing health programs.

The Budget Control Act of 2011 -- adopted in August to allow an increase in the nation's debt ceiling -- gave congressional committee leaders until Oct. 14 to submit their ideas to the Joint Select Committee on Deficit Reduction. The debt panel faces a Nov. 23 deadline to approve at least $1.2 trillion in savings, which Congress must adopt by Dec. 23. Otherwise, broad automatic cuts affecting Medicare and defense spending would kick in.

Many congressional leaders defended existing spending, including for programs overseen by their committees. All 16 of the highest-ranking Democrats on House committees filed suggestions, as did Republicans on the Senate Finance Committee and the chair of the Senate Special Committee on Aging. Democratic governors also weighed in.

Rep. Henry Waxman (D, Calif.), the highest-ranking Democrat on the House Energy and Commerce Committee, recommended maintaining Medicare and Medicaid benefits, as did many House Democrats. He said the debt panel could look for savings by improving care coordination, further eliminating health care fraud and abuse, and tightening spending on prescription drugs. For example, Waxman called on the debt panel to require drug companies to provide larger bulk purchasing discounts in Medicare's prescription drug benefit.

He also sought eliminating Medicare's sustainable growth rate formula and replacing it with "a sustainable, fair policy that coordinates care." The American Medical Association and dozens of specialty organizations and state medical societies have urged the debt committee to repeal the SGR.

Waxman suggested paying for the estimated $300 billion cost of repealing the SGR and other spending by licensing new frequencies for wireless broadband and adopting new tax incentives for energy efficiency.

Drug rebates

Sen. Herb Kohl (D, Wis.), chair of the Senate Special Committee on Aging, offered several health care savings ideas, including requiring drug rebates for Medicare Part B at levels similar to rebates mandated in Medicaid.

Kohl suggested prohibiting drug patent disputes that pay generic drugmakers to delay the introduction of generic drugs. However, associations for generic and brand-name manufacturers have said the patent settlements end potentially long litigation and speed the introduction of generic drugs.

Republicans on the Senate Finance Committee suggested consolidating federal Medicaid funding into a defined annual block grant and scrapping federal Medicaid payments based on benefits. The senators did not suggest funding levels, but the House adopted a budget resolution in early April that would have significantly reduced federal Medicaid funding. Finance Committee member Sen. Olympia Snowe (R, Maine) did not sign a letter sent by other GOP members of the Finance panel.

Democratic governors, meanwhile, lobbied the debt committee members to avoid block granting federal Medicaid funding. Instead, they called for achieving savings by better coordinating care for patients eligible for Medicare and Medicaid.

Patient advocates said Medicaid cuts would affect black and Hispanic Americans disproportionately. "The many chronically ill shut out or priced out of private market insurance would have nowhere to turn if it weren't for Medicaid," said Jennifer Ng'andu, deputy director of National Council of La Raza's Health Policy Project.

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