Text of a Letter from the President to the Speaker of the House of Representatives and the Senate Majority Leader (10/10/00)
                              THE WHITE HOUSE

                       Office of the Press Secretary

For Immediate Release                                           October 10,

                      AND THE SENATE MAJORITY LEADER

                               October 10, 2000

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

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 invest-ment 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 accounta-bility
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; pro-viding 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

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.


                              WILLIAM J. CLINTON

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