Senate Democrats to move forward with bill that would halt 10.6% Medicare physician payment cut despite veto threat

Despite a veto threat from the White House, Senate Democrats plan to move forward in the next two weeks with a bill (S 1951) that would reduce payments to Medicare Advantage plans to offset delaying a 10.6% cut to Medicare physicians' payments, CQ Today reports.

The physician payment cut is scheduled to take effect July 1. The bill, sponsored by Senate Finance Committee Chair Max Baucus (D-Mont.), would cost $18.2 billion over five years and would be funded through the cuts to MA plans, which cost taxpayers more than traditional Medicare.

Before the Memorial Day recess, Baucus ended negotiations with Senate Republicans on the bill. According to CQ Today, the bill "will almost certainly be blocked by GOP members, with the backing of the White House." In a May 22 letter, HHS Secretary Mike Leavitt wrote that President Bush will veto any Medicare bill that includes cuts to MA plans. CQ Today reports that the veto threat "will almost certainly force a compromise later this month." Senate Republicans have proposed a $14.9 billion, five-year plan that includes an 18-month delay of the physician payment cuts.

Meanwhile, interest groups and other lawmakers are pushing to include their own health policy provisions in the bill, according to CQ Today. Sen. Debbie Stabenow (D-Mich.) is pushing for a requirement that data collected by Medicare include information on race, sex and ethnicity. Lawmakers also are pushing for an electronic prescribing provision, which has been supported by the National Association of Chain Drug Stores. NACDS also is advocating for legislation that would increase Medicaid pharmacy reimbursement rates. In addition, Sens. Herb Kohl (D-Wis.) and Chuck Grassley (R-Iowa) are working to include a provision that would "crack down on nursing homes with records of abusing their patients or committing errors that led to injuries and deaths," according to CQ Today (Armstrong, CQ Today, 5/30).

Opinion Piece

The "real losers" of the "draconian payment cuts to physicians" are "Medicare patients, who will be left with reduced access to physician care," Edward Langston, chair of the American Medical Association, writes in a Wichita Eagle opinion piece. Langston adds that physicians will be forced "to make tough decisions" because the cuts will "push payments far below the increasing cost of providing care." He writes, "This is not a hypothetical situation: 60% of physicians say this year's cut will force them to limit the number of new Medicare patients they can treat." He continues that current payment levels are "about what they were in 2001, while the costs of running a medical practice increase," adding that even if "the cuts go through as Medicare projects, physicians will be paid 15% less than they are paid now over a year and a half."

According to Langston, "Intervention by Congress is the only way to stop the cuts." He writes that the "silver lining in the cloud is a bipartisan commitment to preserving seniors' access to care and legislation" (S 2785) that would "replace 18 months of Medicare physician payment cuts with payment updates that better reflect medical practice cost increases." He concludes, "Congress must take immediate action" on the bill, adding, "This will demonstrate real leadership, as we work to preserve access to care for current and future generations of Medicare patients" (Langston, Wichita Eagle, 5/31).