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Sen. Baucus Outlines Medicare Bill

Armen Hareyan's picture

Senate Finance Committee Chair Max Baucus (D-Mont.) laid outthe "final, contentious details" of legislation that would halt a10.6% cut to Medicare physician fees, among other provisions, CQ Todayreports. Baucus plans to introduce the legislation on Friday.

Earlier this week, Baucus outlined some provisions of the working measure,which is "[p]rimarily a Democratic product," according to CQ Today.The proposal would delay the physician fee reduction, which is scheduled to gointo effect on July 1, and increase physician fees by 1.1% for the next 18months.

The legislation also includes financial assistance for low-income beneficiariesenrolled in the Medicare drug benefit, an electronic prescribing initiative anda proposal to ensure pharmacies are paid by Medicare promptly for drugs theydispense to beneficiaries.


The bill would cost $20billion over five years, the majority of which would come from the physicianfee increase, according to CQ Today. Baucus said that the offsetswill come mostly from cuts to the Medicare Advantage program. The offsetsinclude cuts to indirect medical education payments and so-called privatefee-for-service plans under MA. The proposal also would limit use of a MAprocess called "deeming," under which private insurers force healthcare providers not explicitly enrolled in their plans to participate whenbeneficiaries in those plans visit them.

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In a May 22 letter to lawmakers, HHS Secretary Mike Leavitt said thatPresident Bush will veto any legislation that cuts payments to MA plans.Democrats have "pushed hard for such cuts" to MA, saying that it is"overpaid and damaging to traditional Medicare," according to CQToday. MA plans, on average, are paid 117% what traditional Medicarepays (Armstrong, CQ Today, 6/5).

Republican Support

According to CongressDaily,"Baucus is hoping to entice Republican senators to his version of thelegislation that is expected to include sweeteners for vulnerable GOPmembers." Senate Special Committee on Aging ranking member Gordon Smith(R-Ore.) and Sen. Olympia Snowe (R-Maine) have publically announced support forBaucus' legislation (Edney, CongressDaily, 6/6).

Baucus' measure has "attracted some Republican support, but not yet enoughto obtain the 60 votes needed to invoke cloture and end debate on thelegislation," CQ Today reports (CQ Today, 6/5).

Grassley Proposal,Reaction

Finance Committee rankingmember Chuck Grassley (R-Iowa) on Wednesday revealed portions of a competingbill, which he plans to introduce after Baucus' proposal (CongressDaily,6/6). Grassley's bill increases physician fees by 0.5% through 2008 and by 1.1%in 2009.

Grassley said the MA cuts in Baucus' proposal will "guarantee apresidential veto," adding, "Without saying whether the president'sright or wrong, I can say this -- we've got to get things done by June 30, andthat's going to make it impossible." Grassley said his proposal -- whichwill be revealed "soon" -- "can be signed by the president"(CQ Today, 6/5).

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.