Senate Finance Committee Democrats to move forward with Medicare package that includes Medicare Advantage plan cuts

Senate Finance Committee Chair Max Baucus (D-Mont.) on Wednesday said he will move forward with a Medicare package developed by Democrats that likely will be opposed by Republicans and the Bush administration, CQ Today reports.

Baucus said he is retreating from crafting a bipartisan Medicare package that would delay for 18 months a 10.6% cut to physician fees (Armstrong [1], CQ Today, 5/21). Although both parties want to halt the cut, which is scheduled to go into effect on July 1, they have been unable to agree on offsets to pay for the bill, among other issues (Armstrong [2], CQ Today, 5/21).

Baucus said, "It seems clear to me that we're not going to get an agreement in time to meet the deadlines, so I'm going to move forward with a bill that I think has the right policies and priorities for the Medicare program." He also said, "Frankly, the White House is a stone wall. And it makes it very difficult for the Republicans to negotiate," adding, "They just don't want any reductions to any of the (Medicare Advantage) plans."

Baucus and fellow Democrats on the committee have proposed cuts to Medicare Advantage to offset the legislation, including cutting indirect medical education payments to insurers and capping payments to private MA plans. Sen. Kent Conrad (D-N.D.) said capping MA plan payments at 130% of traditional Medicare costs would save $6 billion over five years. Democrats also want to add some other provisions to the measure, including a small increase in the physician fee rate, an electronic prescribing initiative and preventive care programs (Armstrong [1], CQ Today, 5/21). The measure would cost $18.2 billion over five years, according to Conrad.

Medicare legislation drafted by Republicans would cost $14.9 billion over five years, Conrad said (Armstrong [2], CQ Today, 5/21). According to CQ Today, "Republicans will almost certainly block Baucus' proposal to force a compromise after the Memorial Day recess." The compromise package "would likely be a pared down measure," CQ Today reports. Committee ranking member Chuck Grassley (R-Iowa) said, "Before this process is over, I'm confident that we're going to have a bipartisan package that passes the Senate," adding, "There are differences, but there aren't big differences" (Armstrong [1], CQ Today, 5/21).

Opinion Piece

"In July, the government health insurance program for seniors and the disabled will automatically begin draconian payment cuts to physicians," and Medicare beneficiaries "will bear the brunt of the cuts to physicians, as doctors are forced to make tough decisions because of cuts that push payments far below the increasing cost of providing care," American Medical Association President Edward Langston writes in a Seattle Post-Intelligencer opinion piece. Langston adds that Medicare physician reimbursements currently are at "about what they were in 2001, while the costs of running a medical practice increase."

He writes, "And now Medicare projects cuts of more than 15% over a year-and-a-half," and, without congressional action to prevent the reductions, "having a Medicare insurance card will not guarantee access to physician care." About 60% of physicians have said they will limit the number of Medicare beneficiaries they treat without congressional action to prevent the reductions, Langston writes.

However, the "silver lining of the cloud is a bipartisan commitment to preserving seniors' access to care," he writes. Langston concludes, "Immediate congressional action will demonstrate real leadership as we work to preserve access to care for current and future generations of Medicare patients" (Langston, Seattle Post-Intelligencer, 5/21).