Important Changes to Medicare:
Prescription Drug Benefits Coming in 2006
Maureen McNally
Director of Government Relations, Froedtert Hospital
As of this writing, we are still sorting through the thousands of details included in the 678-page Medicare Prescription Drug Bill signed into law by President Bush in December. Although it’s simply too early to assess the law’s full impact, it contains some provisions of interest to Froedtert Hospital.
The new law will provide prescription drug benefits for more than 800,000 Wisconsin Medicare beneficiaries beginning in 2006. It contains numerous changes to hospital and physician payments and policies. In the end, an agreement was reached that removed devastating cuts to physician and hospital reimbursements proposed in earlier versions of the bill. If already low Medicare payments to hospitals and physicians had been cut further, seniors may have had difficulty getting the care they needed. Health care is an integrated safety net. A prescription drug plan paid for by cuts to hospitals and physicians could have compromised senior health by threatening the ability to access timely, appropriate medical care.
The new law also reversed some previous cuts to medical education program payments. This will help protect medical education, as these payments are critical to insuring that Wisconsin can attract, train and retain enough physicians to meet increasing demand in the face of the predicted physician shortage.
The new law will also provide Wisconsin’s rural hospitals with some long-sought payment equity. While provisions such as standardizing rural and urban payment rates don’t help Froedtert, they will likely help Wisconsin’s rural hospitals as they continue toprovide care to Medicare enrollees.
The law also places an 18-month moratorium on new, physician-owned specialty hospitals. These provisions will temporarily slow the proliferation of these facilities and allow the Government Accounting Office to study the impacts on full-service community hospitals and the overall health of the communities we serve. The need for study and a cooling-off period is particularly clear here in Milwaukee, where three specialty hospitals are now operating.
The Medical Prescription Drug Bill is not a cure-all and in many ways, time will tell how it will impact delivery of health care and access to prescription medications. In fact, the prescription drug plan will not be fully implemented until 2006, making additional revisions to the law possible in the intervening time period.
We will continue to monitor the new law, working with our delegation in the coming months and years on these and related health issues.