Copyright 1999 The New York Times Company
The New
York Times
December 6, 1999, Monday, Late Edition -
Final
SECTION: Section A; Page 1; Column
5; National Desk
LENGTH: 1687 words
HEADLINE: Health Industry Sees Wish List Made Into Law
BYLINE: By ROBERT PEAR
DATELINE: WASHINGTON, Dec. 5
BODY:
The budget bill signed last week by President
Clinton is packed with provisions sought by lobbyists for drug companies,
hospitals, health maintenance organizations and nursing homes.
Congress
backed away from any broad overhaul of Medicare and rebuffed
older patients' pleas for coverage of prescription drugs, but it tinkered with
details of the program -- details that determine how billions of dollars are
spent each year. Many provisions follow the lobbyists' recommendations word for
word.
Even as the drug industry attacked Mr. Clinton's plan to offer
comprehensive drug benefits under Medicare, individual drug
companies lobbied frantically to secure or retain coverage of specific products
they make. And to a significant degree, they succeeded.
"This is not a
good way to legislate," said Representative Pete Stark of California, the senior
Democrat on the Ways and Means Subcommittee on Health.
Gordon B. Schatz,
a Washington lawyer who represents medical technology companies, agreed. "This
is no way to run a Congress," he said. "But there's a compelling need for
product-specific legislation because Medicare officials, in
their rush to regulate, have ignored the real complexity of new medical
technology."
Health care lobbyists argue that with more federal money
they can better serve their Medicare patients, the elderly and
the disabled. Their success underlines several hard truths about the politics of
health care in Washington. Lobbyists can block big schemes to which they object,
and rarely agree on any big schemes of their own. But they can score victories
when they pursue narrowly defined objectives.
One example illustrates
the pattern. In 1997, in an effort to save money, Congress instructed the
secretary of health and human services to devise a way of paying for the
thousands of diagnostic tests and procedures performed in hospital outpatient
departments -- everything from breast biopsies to cataract surgery.
Makers of drugs and medical devices complained that
they would be grossly underpaid if the Clinton administration carried out its
plan for hospital outpatient services. And they proposed a solution: certain
high-cost prescription drugs should be excluded from the new system, and
Medicare should pay separately for them. That is exactly what
Congress decided to do.
Medicare generally does not pay
for outpatient prescription drugs, but there are some limited exceptions. For
example, Medicare covers some drugs provided by injection or
infusion in the outpatient department of a hospital or in a doctor's office.
The new Medicare law instructs the health secretary to
make "an additional payment" to cover such drugs and medical
devices.
This provision was sought by three big trade
associations: the Pharmaceutical Research and Manufacturers of America, which
represents drug companies; the Biotechnology Industry Organization, which
represents biotech companies, and the Health Industry Manufacturers Association,
which represents more than 800 makers of medical devices and
diagnostic products.
Several companies were particularly eager to ensure
that Medicare would pay for their products. At their urging,
Congress guaranteed extra payments for any "device of brachytherapy" and for
"radiopharmaceutical drugs."
And what is brachytherapy? It is an
innovative treatment for prostate cancer, often performed as an outpatient
procedure. Radioactive "seeds" are implanted directly into the prostate, in the
hope that they will destroy cancer cells. The seeds, an alternative to radical
surgery, are sold by Indigo Medical, a unit of Johnson & Johnson.
John McKeegan, a spokesman for Johnson & Johnson, said the payment
system devised by the Clinton administration would have cut reimbursement for
this treatment by more than 80 percent, to $1,500 from the current level of
$9,000 to $10,000. "With that kind of reimbursement," he said, "doctors would
have stopped doing the procedure."
A provision of the new law continues
the higher payments. That provision was added at the insistence of
Representative Rob Portman, a Republican from Cincinnati. Indigo Medical is
based in his district.
The new law also requires extra payments for
radiopharmaceutical drugs used in outpatient hospital procedures to diagnose or
treat illnesses. Such drugs include small amounts of radioactive material.
Doctors inject the drugs and can then visualize organs inside the body with the
help of a special camera that detects the radiation.
The most popular
product of this type, Cardiolite, is used to detect heart problems and to
predict a patient's risk of heart attack. Cardiolite is sold by DuPont, the
chemical company based in Wilmington, Del. This provision of the
Medicare bill was inserted by the senior senator from Delaware,
William V. Roth Jr., a Republican who is chairman of the Finance Committee.
Amgen, the nation's biggest biotechnology company, was another big
winner. Amgen lobbyists persuaded Congress to overturn a Clinton policy that
could have eliminated Medicare payment for a company.
The product, Neupogen, is often given to cancer patients because it
counters the adverse effects of chemotherapy. Medicare
officials recently threatened to cut off payment for Neupogen because, they
said, even though patients usually receive such drugs from a doctor, they can
theoretically give injections to themselves.
The campaign to protect
Neupogen was led by Peter B. Teeley, a well-connected Republican who is head of
Amgen's Washington office. He flooded Congress with letters from cancer patients
and doctors saying the Clinton policy was misguided and dangerous, because
elderly patients could not safely administer the drug to themselves.
The
new law prohibits Medicare officials from imposing any new
"restriction on the coverage of injectable drugs."
Lobbying reports
filed with Congress show that Amgen's Washington office spent $3.6 million on
lobbying in the last year. It formed a coalition with five other companies to
work on this one issue, deploying more than 15 lawyers and lobbyists.
Medicare uses more than a dozen formulas and fee
schedules to pay for different types of goods and services. But the secretary of
health and human services, Donna E. Shalala, can unilaterally reduce payments
that she finds to be inherently unreasonable or "grossly excessive."
Dr.
Shalala tried to use this authority to cut Medicare payments
for blood glucose test strips, used by diabetics to monitor their blood sugar
levels. And she was considering similar cuts in payments for many other products
-- an alarming prospect to the health care industry.
The new law says
the secretary may not use this authority again until Congressional investigators
have reviewed her prior actions and she issues new criteria to identify
excessive payments.
Congress ladled out money to a few favored hospitals
by reclassifying the counties in which they are situated. Hospitals in large
urban areas get higher Medicare payments than other hospitals.
The new law says that, for the purpose of Medicare
reimbursement, Lee County, Ill., is deemed to be in the Chicago metropolitan
area. That seemingly minor change will provide $750,000 a year in extra
Medicare money to the county's only hospital, the Katherine
Shaw Bethea Hospital in Dixon, Ill., a small rural town 100 miles west of
Chicago.
The county is represented in Congress by J. Dennis Hastert, the
speaker of the House. Darryl L. Vandervort, president of the hospital, said,
"Mr. Hastert has been working with us on this for three years."
But Mr.
Vandervort insisted: "This is not pork-barrel spending. It was the right thing
to do."
Likewise, under the new law, Brazoria County, Tex., is deemed to
be part of the Houston area. Tom DeLay, the House Republican whip, represents
most of the county. This provision is worth $380,000 a year to Angleton Danbury
Medical Center in Angleton, 45 miles south of Houston. Patti E. Worfe, a
spokeswoman for the hospital, said: "Tom DeLay really made it happen."
Sometimes Congress earmarked money for specific hospitals by name.
Mississippi, the home of the Senate majority leader, Trent Lott, appears to have
received more such grants than any other state.
The new law provides $3
million for environmental medicine and toxicology at the University of
Mississippi Medical Center at Jackson; $2 million to help the university find
plants with medicinal value; $2 million for health care programs at the
University of Southern Mississippi; $2.5 million for a rural health institute at
Mississippi State University, and unspecified amounts for a new cancer research
institute.
"When you invest in health care, you could never ever call it
pork- barrel spending," said Barbara Austin, a spokeswoman for the University of
Mississippi Medical Center.
Members of Congress continually rail against
H.M.O.'s as heartless and bureaucratic. But the new Medicare
law increases payments to them, over objections by the White House, which
contended that they were already overpaid by Medicare.
Karen M. Ignagni, president of the American Association of Health Plans,
observed that H.M.O.'s participating in Medicare would get $4.8
billion of the $16 billion in additional money spent over the next five years as
a result of the new law.
"That's a real vote of confidence in the
importance of managed care for senior citizens," Ms. Ignagni said.
The
industry detested one particular provision of the 1997 budget law: H.M.O.'s had
to pay $95 million a year for a government-run education campaign to advise
Medicare beneficiaries of insurance options.
Lobbyists
persuaded Congress to slash the fees charged to H.M.O.'s. for the education
campaign. Instead of paying the full $95 million, they will pay only a small
fraction of the total, reflecting their share of the Medicare
population, now 16 percent. The Medicare trust fund will pay
the remainder, subject to approval by Congress each year.
"We lobbied
very strongly for that change," Ms. Ignagni said. "We don't mind paying our fair
share. But we didn't want to bear the entire cost."
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