The nation's physicians must decide by year-end whether to continue serving Medicare patients. If they're looking to Congress for help with that choice, they'll have to wait until next year because lawmakers inexplicably went home last month without repairing the formula used to calculate Medicare payments to doctors.
What is so politically puzzling about this inaction is that Congress and the Bush administration agree the formula uses old and flawed data. They know what might happen if it's not fixed and physicians see their payments fall 4.4% next year after a 5.4% drop this year and an additional 12% in cuts to take effect during the next three years. But if it's in fact so important to raise payment rates, and thereby prevent physicians from abandoning Medicare and many of their patients, why didn't legislators act?
It's impossible to identify a single factor or person responsible for the lack of a solution, but the blame game is already under way: The American Medical Association and the Bush administration have scolded the Senate. Members of Congress fault each other. Some hold the AMA responsible.
Prescription drug legislation passed by the House this summer included $30 billion in relief for providers, which would have given physicians a 2% increase in Medicare payments next year. That legislation also would have permanently repaired the formula, but it never got through the Senate, which considered several bills this summer and rejected them after disputes over funding and how to administer a Medicare drug benefit.
Fast-forward to the lame-duck session of Congress, which started Nov. 12 and gave lawmakers one final opportunity to address the physician payment formula before a new Congress convenes in January. The AMA employed the "it's not over 'til it's over" strategy to win concessions during the lame duck. For a while it appeared to be working.
On Nov. 14 the House passed a measure that would have given the Centers for Medicare and Medicaid Services the legal latitude to make adjustments to the physician formula on its own. CMS Administrator Thomas Scully continually has said he would repair the broken formula if granted the authority to do so.
Hailing the House's action, the AMA quickly moved on to the Senate, where there were precious few days left to see passage before Congress adjourned for the year.
The AMA focused like a laser on the House measure, urging the Senate to pass it in press conferences with fellow lobbying groups and in written statements. They wanted to take advantage of the fact that the House bill didn't carry with it any official price tag, which would have made it easier to win approval.
Several sources told Modern Healthcare that House Ways and Means Committee Chairman William Thomas (R-Calif.) and the Bush administration wanted the measure passed without budgetary implications.
On the same day the House passed its bill, an AMA official sent an e-mail to congressional staffers saying the House provision's language was "negotiated with HHS and Justice (Department) attorneys. It is written in the current fashion in order to avoid a (Congressional Budget Office evaluation of its potential cost). In terms of outcome, we expect the anticipated 4.4% reduction to be void and a positive update substituted."
Before the Senate voted, Finance Committee Chairman Max Baucus (D-Mont.) and Budget Committee Chairman Kent Conrad (D-N.D.) requested an official estimate from the CBO.
The CBO responded a day later, saying that the House measure's language might not be strong enough to enable the CMS to repair the formula. If the CMS determined the language was adequate, the CBO said, implementing the measure would cost $43 billion over 10 years-the same amount Baucus and his colleague Charles Grassley (R-Iowa) planned to spend on their own failed relief bill that included help for a broad range of providers in addition to doctors.
Several lobbyists said the AMA e-mail assuming a "free" fix committed a major error by declaring victory before the game was over. One lobbyist called the message a "sophomoric mistake," and another said it cost the AMA and its members $43 billion.
"If the AMA was trying to play this no-cost kind of game, it was a mistake," said a Democratic Senate aide.
AMA Chairman-elect Donald Palmisano, M.D., says he is not familiar with the e-mail, adding that such criticism is part of a "blame and shame game" the AMA does not like to play. Despite that protestation, on Nov. 20 the AMA issued a press release with the headline "Senate Fails Medicare Patients."
Some lobbyists say by publicly blaming the Senate after its rejection of the House measure, the AMA may have alienated lawmakers whose support will be critical to addressing physician payment next year. Baucus, meanwhile, defended inaction on the House measure, arguing that physician payment relief needs to be included in a broader bill that addresses provider relief across the board instead of helping only doctors.
"Either games are being played with legislative language and administrative authority-a dangerous precedent-or physicians are being sold a bill of goods that they should not count on to fix their problem," Baucus said in a written statement on Nov. 19.
As for next year, when Republicans take over Congress and a possible war with Iraq will dominate policy discussions, there is still a consensus that physician payment needs to be addressed quickly. The prospects are hard to calculate, according to lobbyists and Capitol Hill sources, because payment issues are likely to get bogged down in controversy over a Medicare prescription drug benefit.
"Congress knows the formula is broken," says Larry Goldberg, director of the national healthcare practice at Deloitte & Touche. "The problem is, Congress doesn't see the same urgency the rest of us see."
Citing an AMA survey finding that 42% of physicians will abandon Medicare if next year's cuts go into effect, Palmisano says, "You can't get quality medical care if you can't find a physician. We're going to remain optimistic that fair play and the American way will dictate that this has to be fixed in time to prevent a 4.4% cut from going into effect."