Senate Finance Committee discusses offsets for estimated $15M to $18M cost of Medicare payment delay; Bush administration requests June 16 deadline

Senate Finance Committee Chair Max Baucus (D-Mont.) on Wednesday said a Medicare package that would delay for 18 months a 10.6% cut to physician fees would cost between $15 billion and $18 billion over five years, prompting committee members to begin discussions on how to offset those costs, CQ Today reports (Wayne/Armstrong, CQ Today, 5/7).

Sens. Olympia Snowe (R-Maine) and Kent Conrad (D-N.D.) said that committee members continue to examine reducing payments to private insurers that administer Medicare Advantage plans as a potential offset for the bill (Edney, CongressDaily, 5/7). MA plans, on average, are paid an estimated 113% of what traditional Medicare pays per patient (CQ Today, 5/7). Last year, when Congress passed a six-month delay for the Medicare fee cuts, Republicans -- "particularly from rural areas where the plans are popular" -- objected to cuts to the MA program, according to CongressDaily (CongressDaily, 5/7).

House Ways and Means Health Subcommittee Chair Pete Stark (D-Calif.) on Wednesday said he expects Baucus to cut indirect medical education payments under MA that are given to insurers that provide coverage in areas with teaching hospitals. Baucus said no decisions were made on Wednesday, but he did not rule out cutting IME payments. "There are lots of different options on the table," Baucus said, adding, "Just don't know yet." CQ Today reports that members of Congress are "generally in favor of stopping the scheduled" physician fee cuts, but "finding a broadly acceptable offset has been the primary stumbling block to moving a bill forward."

June 16 Deadline

The Bush administration has asked Congress to approve legislation delaying the fee cuts, which are scheduled to take effect on July 1, by June 16 to avoid delays in payments that would result in additional administrative costs, CQ Today reports. "CMS estimated that passing legislation by June 16 would help reduce the possibility of disrupted payments or reprocessed claims that would result in extra administrative costs," Christina Pearson, a spokesperson for HHS, said.

Baucus said that Senate Majority Leader Harry Reid (D-Nev.) has pledged floor time for discussion of the legislation in early June. Baucus said that he would "try" to meet the June 16 deadline but would "certainly" be finished by the end of the month.

However, House members are "nervous" regarding the Senate's timing, according to CQ Today. "The concern here is if the Senate acts so late and sends us a bill in late June and expects us to rubber-stamp it, they're in for a rude awakening," Rep. Shelley Berkley (D-Nev.) said.

According to CQ Today, Congress could go beyond the deadline, but some doctors have vowed to see fewer Medicare beneficiaries if payments are reduced, and "a disruption in payments could have a similar effect" (CQ Today, 5/7).