House Bill Would Reduce Medicare Provider Fee Cut

The leadership of the House Energy and Commerce Committee yesterday introduced legislation that would nearly eliminate a scheduled 5.4% cut in physician fees under Medicare, CongressDaily reports. The Medicare Physicians Payment Fairness Act of 2001 (HR 3351) would reduce the 5.4% cut, scheduled to begin Jan. 1, to 0.9% and would require the Medicare Payment Advisory Commission to develop a new Medicare payment formula for 2003. Committee members said the problem with the current payment system is that it is based on "macro-economic trends," which doctors cannot control. Rep. Sherrod Brown (D-Ohio) said, "Permitting a 5.4% reduction ... based on faulty data is more than unfair, it's irresponsible." However, with the bill expected to cost $1.25 billion, and lawmakers attempting to increase payments for Medicare+Choice, which could cost several billion dollars, House Ways and Means committee Chair Bill Thomas (R-Calif.) said that "funding is a major problem." He added, "We have zero dollars for Medicare in the budget. We're looking at ways to create money within the system and then allocate it." In addition, some lawmakers are looking to block a rule issued by the Bush administration last week that would close the Medicaid loophole (Rovner, CongressDaily, 11/28). Under the loophole, states use the upper payment limit to inflate their Medicaid payments to public facilities, receive "artificially high" matching funds from the federal government, and then take back the excess payments from the facilities and use the extra funds for any budgetary purpose. But CMS Administrator Tom Scully announced last week that the agency will seek to reduce the upper payment limit to 100%, effectively closing the loophole (California Healthline, 11/28). CongressDaily reports that the Medicare physician fee bill could become the "first element of a multi-faceted -- and multi-billion dollar -- Medicare/Medicaid measure" lawmakers want to complete by the end of the year (CongressDaily, 11/28).

In other Medicare news, the Senate Finance Committee yesterday "quietly" introduced a bill that would reform the program's contracting system and simplify the process providers use to resolve billing disputes. Committee Chair Max Baucus (D-Mont.), a cosponsor of the bill, said, "Right now, health care providers are drowning in a sea of complex government regulations. This bill will throw them a lifeline -- so they can survive and continue to offer quality health services to America's seniors." Sens. Charles Grassley (R-Iowa), John Kerry (D-Mass.) and Frank Murkowski (R-Alaska) are also sponsoring the bill. In the House, a similar bill could see floor action next week but is being delayed over a provision that would require Medicare to inform seniors in advance if a certain service will be covered. Although both parties have agreed the measure "should be a no-cost bill," the Congressional Budget Office has "insisted" the advanced notice provision would cost money, CongressDaily reports (Rovner, CongressDaily, 11/28).