U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1 

69–011 2008

110th Congress, 2d Session – – – – – – – – – – – – House Document 110–131 

VETO MESSAGE ON H.R. 6331 

MESSAGE 

FROM

THE PRESIDENT OF THE UNITED STATES 

TRANSMITTING

NOTIFICATION OF THE VETO OF H.R. 6331, THE ‘‘MEDICARE 

IMPROVEMENTS FOR PATIENTS AND PROVIDERS ACT OF 2008’’ 

JULY 15, 2008.—Ordered to be printed 


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To the House of Representatives: 

I am returning herewith without my approval H.R. 6331, the 

‘‘Medicare Improvements for Patients and Providers Act of 2008.’’

I support the primary objective of this legislation, to forestall reductions in physician payments. Yet taking choices away from seniors to pay physicians is wrong. This bill is objectionable, and I am 

vetoing it because: 

• It would harm beneficiaries by taking private health plan 

options away from them; already more than 9.6 million beneficiaries, many of whom are considered lower-income, have chosen to join a Medicare Advantage (MA) plan, and it is estimated that this bill would decrease MA enrollment by about 

2.3 million individuals in 2013 relative to the program’s current baseline; 

• It would undermine the Medicare prescription drug program, which today is effectively providing coverage to 32 million beneficiaries directly through competitive private plans or 

through Medicare-subsidized retirement plans; and 

• It is fiscally irresponsible, and it would imperil the longterm fiscal soundness of Medicare by using short-term budget 

gimmicks that do not solve the problem; the result would be 

a steep and unrealistic payment cut for physicians—roughly 20 

percent in 2010—likely leading to yet another expensive temporary fix; and the bill would also perpetuate wasteful overpayments to medical equipment suppliers. 

In December 2003, when I signed the Medicare Prescription 

Drug, Improvement, and Modernization Act (MMA) into law, I said 

that ‘‘when seniors have the ability to make choices, health care 

plans within Medicare will have to compete for their business by 

offering higher quality service. For the seniors of America, more 

choices and more control will mean better health care.’’ This is exactly what has happened—with drug coverage and with Medicare 

Advantage. 

Today, as a result of the changes in the MMA, 32 million seniors 

and Americans with disabilities have drug coverage through Medicare prescription drug plans or a Medicare-subsidized retirement 

plan, while some 9.6 million Medicare beneficiaries—more than 20 

percent of all beneficiaries—have chosen to join a private MA plan. 

To protect the interests of these beneficiaries, I cannot accept the 

provisions of this legislation that would undermine Medicare Part 

D, reduce payments for MA plans, and restructure the MA program 

in a way that would lead to limited beneficiary access, benefits, and 

choices and lower-than-expected enrollment in Medicare Advantage. 

Medicare beneficiaries need and benefit from having more options than just the one-size-fits-all approach of traditional Medicare 

fee-for-service. Medicare Advantage plan options include health 


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maintenance organizations, preferred provider organizations, and 

private fee-for-service (PFFS) plans. Medicare Advantage plans are 

paid according to a formula established by the Congress in 2003 to 

ensure that seniors in all parts of the country—including rural 

areas—have access to private plan options. 

This bill would reduce these options for beneficiaries, particularly 

those in hard-to-serve rural areas. In particular, H.R. 6331 would 

make fundamental changes to the MA PFFS program. The Congressional Budget Office has estimated that H.R. 6331 would decrease MA enrollment by about 2.3 million individuals in 2013 relative to its current baseline, with the largest effects resulting from 

these PFFS restrictions. 

While the MMA increased the availability of private plan options 

across the country, it is important to remember that a significant 

number of beneficiaries who have chosen these options earn lower 

incomes. The latest data show that 49 percent of beneficiaries enrolled in MA plans report income of $20,000 or less. These beneficiaries have made a decision to maximize their Medicare and supplemental benefits through the MA program, in part because of 

their economic situation. Cuts to MA plan payments required by 

this legislation would reduce benefits to millions of seniors, including lower-income seniors, who have chosen to join these plans. 

The bill would constrain market forces and undermine the success that the Medicare Prescription Drug program has achieved in 

providing beneficiaries with robust, high-value coverage—including 

comprehensive formularies and access to network pharmacies—at 

lower-than-expected costs. In particular, the provisions that would 

enable the expansion of ‘‘protected classes’’ of drugs would effectively end meaningful price negotiations between Medicare prescription drug plans and pharmaceutical manufacturers for drugs 

in those classes. If, as is likely, implementation of this provision results in an increase in the number of protected drug classes, it will 

lead to increased beneficiary premiums and copayments, higher 

drug prices, and lower drug rebates. These new requirements, together with provisions that interfere with the contractual relationships between Part D plans and pharmacies, are expected to increase Medicare spending and have a negative impact on the value 

and choices that beneficiaries have come to enjoy in the program. 

The bill includes budget gimmicks that do not solve the payment 

problem for physicians, make the problem worse with an abrupt 

payment cut for physicians of roughly 20 percent in 2010, and add 

nearly $20 billion to the Medicare Improvement Fund, which would 

unnecessarily increase Medicare spending and contribute to the 

unsustainable growth in Medicare. 

In addition, H.R. 6331 would delay important reforms like the 

Durable Medical Equipment, Prosthetics, Orthotics, and Supplies 

competitive bidding program, under which lower payment rates 

went into effect on July 1, 2008. This program will produce significant savings for Medicare and beneficiaries by obtaining lower 

prices through competitive bidding. The legislation would leave the 

Federal Supplementary Medical Insurance Trust Fund vulnerable 

to litigation because of the revocation of the awarded contracts. 

Changing policy in mid-stream is also confusing to beneficiaries 

who are receiving services from quality suppliers at lower prices. 


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In order to slow the growth in Medicare spending, competition 

within the program should be expanded, not diminished. 

For decades, we promised America’s seniors we could do better, 

and we finally did. We should not turn the clock back to the days 

when our Medicare system offered outdated and inefficient benefits 

and imposed needless costs on its beneficiaries. 

Because this bill would severely damage the Medicare program 

by undermining the Medicare Part D program and by reducing access, benefits, and choices for all beneficiaries, particularly the approximately 9.6 million beneficiaries in MA, I must veto this bill. 

I urge the Congress to send me a bill that reduces the growth 

in Medicare spending, increases competition and efficiency, implements principles of value-driven health care, and appropriately offsets increases in physician spending. 

GEORGE W. BUSH. 

THE WHITE HOUSE, July 15, 2008. 

Æ 


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