Legislation May Halt Medicare Physician Payment Cut

Ruzanna Harutyunyan's picture

The Senate on Wednesday by a 69-30 veto-proof majority approved a House-passed bill (HR 6331) that would delay a 10.6% reduction to Medicare physician fees that was scheduled to take effect last week, the AP/Baltimore Sun reports (AP/Baltimore Sun, 7/10). CMS provided Congress with more time to act on blocking the fee reduction, freezing physician fee rates until July 15 through an administrative measure. The measure failed to receive cloture in the Senate by one vote on June 26. The House last month passed the measure by a veto-proof margin. The bill is similar to a measure (S 3101) proposed by Senate Finance Committee Chair Max Baucus (D-Mont.), which also failed to receive enough votes for cloture (Kaiser Daily Health Policy Report, 7/9). Although it was a cloture vote, the measure was considered approved because of a prior agreement and now heads to President Bush, The Politico reports (Rogers, The Politico, 7/10). The White House has threatened to veto the measure because it would reduce payments to private insurers who participate in Medicare Advantage, the Washington Post reports (Kane, Washington Post, 7/10).

White House spokesperson Tony Fratto did not say whether Bush still would veto the measure, adding, "The president will make that decision" (Armstrong [1], CQ Today, 7/9). Aides said that Bush will try to convince Republicans who voted for the measure to oppose a veto override when the time comes, CQ Today reports (Armstrong [2], CQ Today, 7/9). Vice President Richard Cheney, at a luncheon Wednesday several hours before the vote, reiterated the White House's vow to veto the bill, according to sources from the meeting, the Post reports.

Bill Provisions

The bill would block the reduction in physician fees for 18 months (Washington Post, 7/10). In 2009, it would provide physicians with 1.1% payment increase (Gaouette, Los Angeles Times, 7/10). The bill also would prevent cuts to Tricare, the U.S. military health care program, which uses the same payment rates as Medicare. Groups representing service members said that the fee reductions would have been a detriment to the 9.2 million active and retired personnel and their families. The measure also contains other provisions, including one that would increase Medicare preventive and mental health benefits (Los Angeles Times, 7/10).

The bill also would provide physicians a slight increase in payments for adopting electronic prescribing, but in later years, physicians who do not use the technology will receive reduced payments. It also would provide some assistance for low-income beneficiaries (Wilde Mathews/Lueck, Wall Street Journal, 7/10). Another provision would roll back and delay for 18 months a competitive bidding pilot program for durable medical equipment under Medicare. The program, which is estimated to save about $1 billion annually once it is fully implemented, went into effect on July 1 (Armstrong [1], CQ Today, 7/9).

Offsets, Reactions

The cost of the measure is offset by a reduction in payments to MA plans of $14 billion over five years, according to the Post (Washington Post, 7/10). Insurance companies and some Republicans said that if the measure becomes law, it will lead to benefit reductions to beneficiaries who are enrolled in MA plans. However, medical groups said that the plans are paid on average 12% to 17% more than traditional Medicare and that the cuts eliminate waste. "If they cut services to seniors, it's because they choose to, rather than cut advertising or profits," Maria Freese of the National Committee to Preserve Social Security and Medicare said (Los Angeles Times, 7/10).

Kennedy Returns for Vote

Sen. Edward Kennedy (D-Mass.), who is undergoing treatment for brain cancer, "made a brief, triumphant return" to the Senate on Wednesday to vote for the measure, the Boston Globe reports (Milligan, Boston Globe, 7/10). Kennedy has been absent from the Senate since May, when he was diagnosed with a brain tumor (Espo, AP/Miami Herald, 7/10). Senate officials said that Kennedy was not happy that he missed the last vote, which ended one vote shy of cloture (Hulse/Pear, New York Times, 7/10). Kennedy on Tuesday told Senate Majority Leader Harry Reid (D-Nev.) he would be present for the vote (AP/Miami Herald, 7/10). According to the Globe, "Until Kennedy showed up, Senate Democrats had not been able to muster the 60 votes needed to stop a Republican filibuster" (Boston Globe, 7/10). Kennedy in a statement said, "Win, lose or draw, I wanted to be here," adding, "I wasn't going to take the chance that my vote could make the difference" (Gordon Meek, New York Daily News, 7/10).


Republicans Cross Party Lines

After the measure received its 60th vote, nine more Republicans -- Saxby Chambliss (Ga.), Johnny Isakson (Ga.), Lamar Alexander (Tenn.), Bob Corker (Tenn.), John Cornyn (Texas), Kay Bailey Hutchinson (Texas), Mel Martinez (Fla.), Arlen Specter (Pa.) and John Warner (Va.) -- crossed party lines and voted for the measure (New York Times, 7/10). In all, 18 Republicans voted for the bill (Washington Post, 7/10). The Texas Medical Association withdrew its endorsement of Cornyn after his earlier vote against the measure (Raju/Young, The Hill, 7/9). Alexander and Corker changed their vote after Senate leaders said that language reinstating a Tennessee hospital's right to be reimbursed by Medicaid for treatment of uninsured patients from Arkansas and Mississippi would soon pass the chamber (Edney/Cohn, CongressDaily, 7/10). Reid said, "Let the president veto it," adding, "We've got overwhelming support in the House and more than enough votes to override a veto today" (Los Angeles Times, 7/10). Before Kennedy appeared in the Senate, Cornyn offered a bill (S 2729) that would replace the current physician fee formula, but it was rejected. Baucus said, "It's a $380 billion bill, unpaid for, and it's going nowhere." Cornyn said that it is necessary for Congress to find a long-term solution to physician payment (Armstrong [1], CQ Today, 7/9).

McCain Not Present for Vote, States Opposition

Presumptive Republican presidential nominee Sen. John McCain (Ariz.) was the only senator who missed the vote, but he did state opposition to the measure after he had "largely stayed silent on the issue," The Hill reports. McCain in a statement said, "We should not hold our doctors and seniors hostage to political gamesmanship and political votes," adding, "While this bill does meet our obligation to provide proper reimbursement to Medicare physicians, it also rolls back important reforms, increases drug premiums and places 2.3 million seniors at risk of losing the private health care coverage of their choice" (The Hill, 7/9).

Trade Group Comments

James Rohack, president-elect of the American Medical Association, said, "The physicians of America, along with our patients, certainly made it well-known over the last week of their concerns about the impact of not taking action" (Armstrong [1], CQ Today, 7/9). AARP CEO Bill Novelli said, "We hope ... President (Bush) recognizes the overwhelming bipartisan support that passed this bill in both chambers of Congress and signs it into law" (Jackson, Bergen Record, 9/10). AMA and AARP had run lobbying campaigns for the measure over the Fourth of July recess (Pierce/Billings, Roll Call, 7/10).

Robert Zirkelbach -- a spokesperson for America's Health Insurance Plans, which opposes the measure -- said that its cuts to MA were "unfortunate." AHIP said the Congressional Budget Office estimates that 2.3 million fewer beneficiaries will enroll in MA plans in 2013 because of the changes the bill would make to the program (Wall Street Journal, 7/10).

Opinion Pieces

* Sen. Sam Brownback (R-Kan.), Wichita Eagle: "Physicians and patients participating in the Medicare program face uncertainty about the future" of the program, as shortages of health care professionals, an increased number of beneficiaries and scheduled reductions in physician fees will contribute to "a full-blown crisis in the health care system," Brownback writes in an Eagle opinion piece. According to Brownback, Medicare beneficiaries "should have access to the highest quality health care professionals and services, and health care professionals should be encouraged, rather than discouraged, to serve our Medicare beneficiaries." He also criticizes the decision by Reid to hold a vote on the "controversial" Medicare bill, rather than a different bill that he and other Republicans supported (Brownback, Wichita Eagle, 7/10).

* Scott Gottlieb, New York Post: The "pitting of insurers against health care providers for pieces of the Medicare pie is now an annual Washington event," but, "while various interests battle over narrow slices of political terrain, everyone ignores systemic problems that lower the quality of care," Gottlieb, a resident fellow at the American Enterprise Institute and a former senior official at CMS, writes in a Post opinion piece. He writes that the Medicare bill passed by the Senate "will push off cuts to the fees physicians get paid for seeing Medicare patients" and "doesn't address Medicare's flawed process for setting the prices of medical services." According to Gottlieb, few lawmakers "have the stamina to address Medicare's flawed policies," and "fewer vested interests ... want to reopen settled rules." However, he writes, the current "system breeds dysfunction -- including poor health care" -- and "encourages doctors to deliver care that fits the billing codes -- to do listed medical procedures, rather than more mundane and lower-paid, but effective, services like counseling or screening." Gottlieb writes, "Rules set in Washington, by people insulated from the consequences of their decisions, will increasingly limit the health care choices of ordinary people," rather than leave "pricing to markets, via competing private plans that cover set benefits for a defined contribution of money." He adds, "Every time Medicare has experimented with market-style pricing ... it has found that the market-based prices wind up being far lower than the rates that its own actuaries would set for the same goods and services" (Gottlieb, New York Post, 7/10).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.


Please, click to subscribe to our Youtube Channel to be notified about upcoming health and food tips.


President Bush is just worried about collecting funds for his presidential libray and not for the good of medicare and tricare (military and their dependents). He needs to gracefully back away from this issue and decline to veto the bill. A concerned doctor in Texas.