Congress Closer to Agreement on Physician Payments
House and Senate leaders have agreed to use a stabilization fund established under the 2003 Medicare law to help finance the reversal of a Medicare physician reimbursement reduction scheduled to take effect on Jan. 1, 2007, but remain divided on other provisions, CongressDaily reports (Vaughan/Johnson, CongressDaily, 12/7). Medicare physician reimbursements will decrease by 5.1% without congressional action during the lame-duck session, which likely will end this week.
Congress established the stabilization fund under the 2003 Medicare law to encourage health insurers to offer prescription drug plans in underserved areas to help finance the reversal of the physician reimbursement reduction. Elimination of the stabilization fund would offset an estimated $5.8 billion of the $10.5 billion cost over five years of the reversal of the Medicare physician reimbursement reduction (California Healthline, 12/6).
On Wednesday, Senate Finance Committee Chair Chuck Grassley (R-Iowa), committee ranking member Sen. Max Baucus (D-Mont.) and House Ways and Means Committee Chair Bill Thomas (R-Calif.) agreed to include a reversal of the Medicare physician reimbursement reduction in a bill that also includes tax cut extensions and trade policies and energy policies (CongressDaily, 12/7).
Senate Majority Leader Bill Frist (R-Tenn.) on Wednesday said, "I feel we will have a single product that we can take through" both the House and Senate during the lame-duck session.
However, "Thomas remained at odds with Grassley and Baucus over the terms of the Medicare payment fix," CQ Today reports.
The Senate Finance Committee has proposed to freeze the Medicare physician reimbursement reduction for one year and provide physicians who participate in a new quality reporting program a 1.5% increase in July 2007.
According to Senate aides, the proposal includes an update to the baseline for Medicare reimbursements in future years, a provision not included in the proposal from Thomas (Van Dongen, CQ Today, 12/6). In addition, the proposal from the committee includes other health care provisions not included in Thomas' proposal -- such as a redistribution of funds to SCHIP, a maximum rate of 5.5% that states could tax Medicaid providers, transitional medical assistance for individuals who lose Medicaid eligibility, and a requirement that federal agencies have access to all Medicare Advantage and Medicare prescription drug plan data submitted to CMS (Carey, CQ HealthBeat, 12/6).
In other news, Congress likely will approve a continuing resolution to finance operations for most federal agencies until Feb. 15, 2007, that includes additional funds for the Department of Veterans Affairs, CongressDaily reports. Under the resolution, which Congress likely will approve on Thursday or Friday, VA would not receive the 12% increase in funds proposed under the fiscal year 2007 Military Construction-VA appropriations bill.
However, House Appropriations Committee Chair Jerry Lewis (R-Calif.) has agreed to an exemption that would provide VA with "unprecedented flexibility to transfer funds to cushion medical services accounts," CongressDaily reports (Cohn, CongressDaily, 12/7).
Rep. James Walsh (R-N.Y.), chair of the House Appropriations Subcommittee on Military Quality of Life and VA and Related Agencies, said the resolution would allow VA to transfer as much as $650 million and to use an additional $590 million in unspent funds (Higa/Dennis, CQ Today, 12/6).