Letter to Congressional Leaders on Health Care Legislation

Dear Mr. Speaker: (Dear Mr. Leader:)

I am writing to express my serious concerns that the Congressional Republican Leadership is preparing to pass unjustifiably large Medicare health maintenance organization (HMO) payment increases while preventing passage of a strong Patients' Bill of Rights. Managed care reform in the 106th Congress should focus on patient protections, not on excessive payments to managed care plans. Moreover, these reimbursement increases are effectively diverting resources from critically important health care priorities.

This past weekend marked the 1-year anniversary of the overwhelmingly bipartisan passage of the Norwood-Dingell Patients' Bill of Rights. Despite the bipartisan majority supporting this bill in the Senate, parliamentary and political tactics have blocked an up-or-down vote on this long-overdue legislation.

At least as disconcerting is that Congress is proposing to dedicate $25 to $53 billion in increased payments to managed care—without a sound policy basis. The Congress is currently contemplating dedicating 40 to 55 percent of their total investment in provider payments and beneficiary services to increase managed care payments—over twice the amount they plan to spend on hospitals and over five times the amount that they plan to spend on beneficiaries. The Congress is proposing this investment despite studies showing that Medicare managed care plans are overpaid by nearly $1,000 per enrollee and that their payment rates have grown faster under the Balanced Budget Act than the payment rates for traditional Medicare.

It is important to note that increased payments provide no guarantee that Medicare HMOs will stop dropping benefits or abandoning seniors' communities altogether. It is clear that increasing payments to managed care plans did not work this year—we invested an additional $1.4 billion in Medicare+Choice, yet watched nearly 1 million seniors and people with disabilities lose access to plans. Without explicit accountability provisions, it will not work next year either.

The unwarranted managed care payment increases would deprive funding for initiatives that would have real effects on peoples' lives, such as: restoring State options to insure vulnerable legal immigrants; fully funding the Ricky Ray Relief Fund; providing health insurance to children with disabilities; funding grants to integrate people with disabilities into the community; improving nursing home quality; eliminating Medicare preventive services cost sharing; targeting dollars to vulnerable hospitals; assuring adequate payments to teaching hospitals and home health agencies; and funding other critical health priorities. These high-priority initiatives are outlined in additional detail in the attached document.

These initiatives represent our highest health priorities. In contrast, Congress is increasing reimbursement to managed care plans at a time when Medicare managed care plans are about to receive billions of dollars in increased Medicare payments, which are linked to increases in fee-for-service payments to hospitals, nursing homes, and other providers.

It is long past time that we work together in a bipartisan fashion to respond to the Nation's highest health care priorities. It is irresponsible to provide excessively high reimbursement rates for HMOs without ensuring that they are accountable through the Patients' Bill of Rights and through commitments to provide stable and reliable services to Medicare beneficiaries. I urge you to produce more balanced legislation that puts Medicare beneficiaries and the Nation's taxpayers first.

Sincerely,

WILLIAM J. CLINTON