On February 26, 2014, the House Energy and Commerce’s Health Subcommittee held a hearing to address newly proposed regulations by the Centers for Medicare and Medicaid Services (CMS) regarding the Medicare Part D prescription drug program. CMS’ proposal, which was announced late last week, has sparked outrage from a number of stakeholders and has health care providers and lawmakers alike concerned with the impact these regulations will inevitably have on this highly popular program and older Americans.
The Health Subcommittee’s hearing, entitled, “Messing with Success: How CMS’ Attack on the Part D Program Will Increase Costs and Will Reduce Choices for Seniors,” focused intently on the proven success of this market-based program and the reasons behind CMS’ shocking new proposal. In his opening statement, Subcommittee Chairman Joe Pitts (R-PA) described Part D as a “government success story” and indicated that “Part D should be the model for future Medicare reform.” Yet, despite the fact that more than 90% of Part D participants are satisfied with their current plans, CMS wants to fundamentally restructure the program with a new 700-page rule.
Republican members of the subcommittee and more than 250 outside groups – including AMAC – have expressed their deep concerns regarding CMS’ proposed regulations. What CMS has proposed threatens to sharply diminish the number of plans available to seniors, raise premium prices, and erode the free market, competitive principles that guide Part D. In short, Chairman Pitts insisted that CMS wants to “put Washington in the driver seat instead of seniors.”
Naturally, a number of Republican Congressmen and women posed the obvious question to CMS representative, Jonathan Blum, who appeared before the subcommittee: What is the motivation behind CMS’ decision to propose new regulations to Part D when it’s already working so effectively?
Speaking as Principal Deputy Administrator of CMS, Blum explained that while Part D has “never been stronger,” CMS believes the newly proposed regulations will address vulnerabilities within the Medicare Part D program. Blum explained that these vulnerabilities include high rates of beneficiary complaints (30,000 in the last year), inappropriate drug prescribing by physicians, prescriber fraud, compliance issues among Part D sponsors, and too many Part D plan choices available to beneficiaries. In addition, Blum stated that CMS expects the spending of Part D to increase substantially over the next 10 years – making it necessary for CMS to take steps to address all of these vulnerabilities through the proposed regulations.
For many Republicans, Blum’s testimony did little to dispel fears that the proposed CMS regulations will do anything but harm Part D and the 39 million Americans participating in the prescription drug program. Currently, there are 35 Part D plans available to consumers, but the CMS rule would reduce the number of plans available to a mere two. According to Blum, simplifying the marketplace will make it easier for seniors to navigate. In other words, too much choice is a bad thing. Moreover, a drastic reduction in the number of plans available will consequently cause premium prices to rise.
Several members of the subcommittee expressed their disdain at what they believe is CMS trying to mask its attempt to expand government control in Part D as an opportunity to strengthen the program for mature Americans and seniors. For example, the 30,000 complaints regarding Part D that were issue last year comprise only one tenth of the individuals participating in the program. According to Representative Michael Burgess, M.D. (R-TX), this is another example of Washington pushing for “a big government solution to a problem that simply does not exist.”
AMAC shares in the concerns of many Republicans on the subcommittee and believes that CMS’ proposal will inflict significant harm on the Part D program as well as on the mature Americans and seniors who participate in it. Prior to the subcommittee’s hearing, AMAC submitted a letter to Chairman Pitts and Ranking Member Frank Pallone (D-NJ) stating our numerous reasons for concern. As a champion of free markets, AMAC does not want to see the role of government unnecessarily expanded in ways that could lead to cost burdens placed on providers and consumers and could stand to alter a program that is already popular and successful.
While this hearing provided insight into CMS’ reasons for proposing new rules to Medicare Part D, AMAC will continue to actively fight this bureaucratic move. AMAC’s presence on Capitol Hill has allowed us to directly engage with lawmakers on this issue and to make our voice heard. AMAC will continue to monitor Congress as it works to gain more information regarding the regulations so that members of the fastest growing alternative seniors advocacy organization can stay informed.