Prospects for a broad Medicare legislative package were thrown into jeopardy last week after a stalemate over howand for how longsuch a bill should be funded. As a result, physicians may have to start the new year being paid 10% less for each Medicare patient they treat while hospitals could see a raft of favorable provisions slip away.
The stalemate, primarily across party lines, led Sen. Max Baucus (D-Mont.) on Dec. 5 to end Senate Finance Committee negotiations, deciding instead to take his appeal directly to members of the House. Its important to move as quickly as possible toward a final Medicare bill before the end of this year, Baucus said, adding that he would still consult with members of the committee that he chairs.
Still, the move to pull up stakes on the Senate side before a bill had been officially drafted was seen as a sign of weakness by some policy veterans, many of whom said that the haggling has ultimately clouded the prospects for passage this year. One healthcare lobbyist, who has followed the internal negotiations closely, put the odds at slim and none.
The legislative maneuver came after committee members couldnt agree on how to best prevent a 10% reduction in physician pay from happening. Republican members want to stop those cuts for one year, while Baucus and the Democrats want a two-year solution. The committee also struggled with finding legislative offsets to pay for the fix, which government accountants said would cost roughly $8 billion per year. Hospitals and other groups are pushing in part for a reduction in payments to Medicare Advantage to fund a physician fix in order to stave off deeper cuts to their own reimbursements.
The Baucus move came days after White House officials said President Bush would likely veto a Medicare bill if it cuts payments to Medicare Advantage, raises taxes or otherwise overturns White House-favored policies. Though nothing has been set, sources indicated that the committee would have shaved up to $14 billion from the Medicare Advantage program.
Americas Health Insurance Plans, lobbying against Medicare Advantage cuts, and several consumer groups that favor program reforms, jockeyed for lawmakers attention. AHIP, part of the Coalition for Medicare Choices, sent to Congress more than 100,000 signed letters opposing the cuts. Meanwhile, the Alliance for Retired Americans and the National Committee to Preserve Social Security and Medicare countered with some 48,000 signed petitions that favored reducing Medicare Advantage payments.
A push for information technology mandates is also part of the debate. In a letter sent to Baucus and Sen. Chuck Grassley (R-Iowa), HHS Secretary Mike Leavitt said that he wants to see a bill that includes payment incentives to physicians who adopt health IT and who practice the highest quality of care. The letter also highlighted presidential deal breakers, including any provisions that aim at tinkering with the Medicare prescription drug program or other components of the Medicare Modernization Act of 2003.
Theres still a great deal of uncertainty over what can happen before the legislative sessions end later this month. A hospital industry lobbyist called a standalone Medicare bill a near impossibility. Rather, lawmakers will concentrate their efforts on other legislative vehicles, such as a continuing resolution funding health programs at current levels or a catchall omnibus bill, as ways a Medicare package could sidestep a presidential veto.
A Medicare bill that passed the House earlier this year likely will act as the new baseline for Senate and House negotiators, said Richard Pollack, executive vice president at the American Hospital Association. The bill, passed as part of a broader childrens health insurance package, included a range of provisions.
For instance, the bill includes an AHA-opposed 0.25% cut over nine months to the inpatient and outpatient marketbasket updates for fiscal 2008, roughly $1.4 billion over five years. But AHA-favored initiatives that would freeze the inpatient rehabilitation rule, or 75% rule, at 60% are also included. The House package also contains provisions that would roll back the whole hospital exemption, effectively stopping doctors from referring patients to a hospital where they have a financial stake.
Molly Sandvig, executive director of Physician Hospitals of America, which represents doctor-owned hospitals, said that a vastly pared-down version of the bill could work in their favor. She said the group would continue to work against the whole hospital exemption.
But the AHA wants the opposite. Pollack said the association would push to include two other provisions: one that would delay expansion of the CMS recovery audit program and another that would put a moratorium on certain Medicaid provisions.