Debate Continues Over Spending Amounts in Medicare Reform Package

Senate Finance Committee Chair Max Baucus (D-Mont.) is negotiating with the House to reach a compromise on Medicare legislation, and he said the package could become part of an omnibus spending bill, CongressDaily reports (Edney/Johnson, CongressDaily, 12/7).

In recent weeks, Baucus has debated with committee Republicans over whether to reverse the reduction in Medicare physician reimbursements for one year or two years, as well as over reductions in Medicare Advantage payments to help fund the reversal. Baucus canceled a mark up of the Medicare bill one day after the Bush administration threatened to veto any legislation that includes reductions in MA reimbursements (California, 12/7).

The House passed a Medicare reform package that includes $50 billion worth of cuts to MA plans. Baucus is pushing for a smaller set of MA cuts that add up to less than $20 billion. It is still unknown whether the physician fee cuts would be halted for one year or two years, CongressDaily reports (CongressDaily, 12/10).

Baucus said the omnibus spending bill is expected to be on the House floor for a vote on Tuesday, but having a Medicare package by Tuesday is "ambitious," adding, "I think it's a stretch." He added that the package might become a separate measure with a bill that would fix the alternative minimum tax.

Baucus last week confirmed that the Finance Committee has discussed the option of curbing the physician reimbursement cut by shifting the cost of its reversal to later years, CongressDaily reports (CongressDaily, 12/7).

The American Medical Association in a draft letter addressed to the Finance Committee wrote that legislation to fix the physician cut should not use so-called "balloon" financing.

The draft letter states, "We urge members of the Senate Finance Committee to develop" a sustainable growth rate provision that "properly funds a solution to this problem and does not rely on 'balloon' financing," adding, "If the Finance Committee were to propose such an approach, the undersigned organizations would be forced to oppose the proposal." AMA last week circulated the letter to other physician lobby groups for signatures but did not send the letter because the mark up was canceled (California Healthline, 12/7).

Baucus said, "We've got to find a way to pay for it," adding that Congress will "find a way." Most members of the Finance Committee agree the cut should not go into effect, but refusal by Republicans and the White House to accept MA cuts is hindering negotiations, according to CongressDaily (CongressDaily, 12/7).

Lawmakers looking to place more scrutiny on physician-owned specialty hospitals want to add provisions to the Medicare reform package, the Washington Post reports.

A 2004 moratorium on building new physician-owned hospitals has expired. Opponents of the hospitals say such hospitals create conflicts of interest and take the most easily treatable patients, leaving community hospitals to treat the more costly, many times uninsured, patients. Proponents of physician-owned hospitals say the centers increase quality of care and competition.

Finance Committee ranking member Chuck Grassley (R-Iowa) said, "My motivation for seeking reforms over a long period of time is the effect that specialty hospitals have on community hospitals when specialty hospitals pass the buck on emergency care and cherry-pick based on profits rather than patient needs." Grassley added that it is "not clear" whether reforms on physician-owned hospitals could be included in the Medicare package (Lee, Washington Post, 12/9).