Medicare Legislation Would Further Delay Physician Fee Cut

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Physician Fee Cut

Congressional aides at aforum on Wednesday said they are optimistic that Congress can pass Medicarelegislation this year that likely would stop for 18 months a 10.6% cut toMedicare physician fees, CQ Today reports. The fee cut isscheduled to go into effect on July 1 (Armstrong, CQ Today, 1/16).

President Bush last month signed into law a bill that delays the fee cut forsix months and extends SCHIP through March 2009. The bill increased Medicarephysician fees by 0.5% during that period and extended several programs thatprovide higher Medicare reimbursement rates to rural health care providers andhospital laboratories. In addition, the bill extended for six months rural andlow-income subsidies, as well as payments for rehabilitative therapy underMedicare (Kaiser Daily Health PolicyReport,12/20/07).

According to CQ Today, the Senate is expected to lead work on thepackage, and the Senate Finance Committee is expected to begin working on themeasure in the opening weeks of the new session. A Democratic Finance Committeeaide said the package would cost between $12 billion and $15 billion over fiveyears. The aide said that the Finance Committee intends to abide by pay/gorules, which raises the "question of where lawmakers will find thebillions of dollars for the package," CQ Today reports.


Democrats have sought to make cuts to Medicare Advantage plans, but aRepublican Finance Committee aide in an e-mail wrote that Bush would veto anylegislation containing "wholesale cuts" to MA plans. However, theaide said targeted cuts might be approved, adding that cuts to bonus paymentsfor teaching hospitals and cuts to private fee-for-service plans could bepossible. Democrats also want to create restrictions on how MA plans aremarketed, which might generate some savings (CQ Today, 1/16).

Bush Might AddressMedicare Physician Fee Cut, Leavitt Says

HHS Secretary Mike Leavitt on Wednesday said thatthe budget Bush will release next month might include a proposal to fix theMedicare physician fee cut, CongressDaily reports. Leavitt saidthat lawmakers cannot continue to patch the fee cut on "a six-month bysix-month basis. Next year, we'll be staring down the barrel of a 15%reduction, and the year after that it's 20, and we have to solve this."

Bush for the first time is required by law to send a Medicare savings proposalto Congress after he proposes his budget because Medicare trustees last yeartriggered a "Medicare funding warning." The warning is issued whentrustees for two consecutive years predict that federal general fund revenuemust be used to pay for 45% or more of total Medicare costs within seven years.Aides and lobbyists "say the White House's savings proposal couldsignificantly alter Capitol Hill discussions surrounding Medicare and otherhealth-related issues," CongressDaily reports (Edney, CongressDaily,1/17).

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