Lawmakers Continue To Debate Medicare Package Provisions

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Senate Finance Committee Chair Max Baucus (D-Mont.) isnegotiating with the House to reach a compromise on Medicare legislation, andhe said the package could become part of an omnibus spending bill, CongressDailyreports (Edney/Johnson, CongressDaily, 12/7). In recentweeks, Baucus has debated with committee Republicans over whether to reverse ascheduled 10%reduction in Medicare physician fees for one year or two years, aswell as over reductions in Medicare Advantage payments to help fund thereversal. Baucus canceled a mark up of the Medicare bill one day after the Bushadministration threatened to veto any legislation that includes reductions inMA reimbursements (Kaiser Daily Health PolicyReport, 12/7).

The House passed a Medicare reform package that includes $50 billion worth ofcuts to MA plans. Baucus is pushing for a smaller set of MA cuts that add up toless than $20 billion. It is still unknown whether the physician fee cuts wouldbe halted for one year or two years, CongressDaily reports (CongressDaily,12/10).

Baucus said the omnibus spending bill is expected to be on the House floor fora vote on Tuesday, but having a Medicare package by Tuesday is"ambitious," adding, "I think it's a stretch." He addedthat the package might become a separate measure with a bill that would fix thealternative minimum tax.

'Balloon' Financing

Baucus last week confirmedthat the Finance Committee has discussed the option of curbing the physicianreimbursement cut by shifting the cost of its reversal to later years, CongressDailyreports (CongressDaily, 12/7).

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The American Medical Association in a draft letter addressed to theFinance Committee wrote that legislation to fix the physician cut should notuse so-called "balloon" financing. The draft letter states, "Weurge members of the Senate Finance Committee to develop" a sustainablegrowth rate provision that "properly funds a solution to this problem anddoes not rely on 'balloon' financing," adding, "If the FinanceCommittee were to propose such an approach, the undersigned organizations wouldbe forced to oppose the proposal." AMA last week circulated the letter toother physician lobby groups for signatures but did not send the letter becausethe mark up was canceled (Kaiser Daily HealthPolicy Report, 12/7).

Baucus said, "We've got to find a way to pay for it," adding thatCongress will "find a way." Most members of the Finance Committeeagree the cut should not go into effect, but refusal by Republicans and theWhite House to accept MA cuts is hindering negotiations, according to CongressDaily(CongressDaily, 12/7).

Physician-OwnedHospitals

Lawmakers looking to placemore scrutiny on physician-owned specialty hospitals want to add provisions tothe Medicare reform package, the Washington Post reports. A 2004 moratorium on building newphysician-owned hospitals has expired. Opponents of the hospitals say suchhospitals create conflicts of interest and take the most easily treatablepatients, leaving community hospitals to treat the more costly, many timesuninsured, patients. Proponents of physician-owned hospitals say the centersincrease quality of care and competition.

Finance Committee ranking member Chuck Grassley (R-Iowa) said, "Mymotivation for seeking reforms over a long period of time is the effect thatspecialty hospitals have on community hospitals when specialty hospitals passthe buck on emergency care and cherry-pick based on profits rather than patientneeds." Grassley added that it is "not clear" whether reforms onphysician-owned hospitals could be included in the Medicare package (Lee, WashingtonPost, 12/9).

Reprintedwith permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign upfor email delivery at kaisernetwork.org/email . The Kaiser Daily Health PolicyReport is published for kaisernetwork.org, a free service of The Henry J.Kaiser Family Foundation.

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