President Set To Reject Medicare Bill; Congress Ready To Override Veto

In a conference call on Monday, HHS Deputy Secretary Tevi Troy said that President Bush as early as Tuesday intends to veto legislation (HR 6331) that would delay a 10.6% reduction to Medicare physician fees that was scheduled to take effect on July 1, CongressDaily reports (Edney, CongressDaily, 7/14).

On Wednesday, the Senate approved the measure 69-30 after it failed to receive enough votes for cloture on June 26. The House passed the bill 355-59 on June 24.

CMS provided Congress with more time to act on blocking the fee reduction, freezing physician fee rates until Tuesday through an administrative measure.

The bill is similar to a measure (S 3101) proposed by Senate Finance Committee Chair Max Baucus (D-Mont.) that did not pass in the Senate (California Healthline, 7/11).

A House Democratic Leadership aide said that the House will vote on a veto override "the same day we get it," according to CQ Today.

Regan Lachapelle, a spokesperson for Senate Majority Leader Harry Reid (D-Nev.), said the Senate will "act shortly after the House acts."

According to CQ Today, both chambers are expected to retain the two-thirds majorities necessary to override the president's veto.

Troy's announcement "end[s] speculation that Bush might bow to congressional pressure and sign the bill," CQ Today reports (Armstrong [1], CQ Today, 7/14).

Critics of the bill delaying the 10.6% reduction to physician fees say it ignores long-term problems with entitlement spending, the Christian Science Monitor reports.

Gail Wilensky, a senior fellow at Project Hope and former chair of the Medicare Payment Advisory Commission, said that the measure "in no way solves the fundamental problem of Medicare in general -- or the very significant problem of how we reimburse physicians and the perverse incentives of the current system."

Wilensky said that in the short term, the system for calculating physician payments under Medicare needs to be changed so that it does not reward physicians who do more complex services. Wilensky added that the unfunded liability for the program needs to be addressed for the long term. Health experts say that Medicare's unfunded liability is more than $70 trillion.

Michael Tanner, a senior fellow at the Cato Institute, said that Congress targets physician reimbursement rates because they are "low-hanging fruit, rather than making structural changes."

However, Congress blocks the cuts every year and is going to "end up not making any changes in the Medicare system at all," which is "hurtling toward insolvency," he said (Russell Chaddock, Christian Science Monitor, 7/15).

The temporary delay on claims processing CMS enacted to allow more time for Congress to block reductions to physician fees expires Tuesday, and the agency will begin processing claims from July 1 with a 10.6% cut, CongressDaily reports.

CMS spokesperson Peter Ashkenaz said that by law the agency cannot delay the fee any further. According to CongressDaily, "Bouncing CMS between implementing the cut and staving it off in the span of just a few days could prove difficult" (Edney, CongressDaily, 7/15).

In Paul Krugman's New York Times column, he makes an "optimistic assessment of the chances for universal health care" but "didn't mention the basic problem of cost control," Arnold Relman and Marcia Angell, both physicians and former editors of the New England Journal of Medicine, write in a Times letter to the editor.

Relman and Angell write that CBO projects that Medicare spending, if unchanged, "will soon break the federal budget." In addition, they write that private insurance is "rising even more rapidly."

Relman and Angell write, "If we want universal coverage, we will have to control costs, and that will require reforming the way we pay for medical care and the way it is organized and delivered," concluding, "Simply making insurance available to everyone won't suffice" (Relman/Angell, New York Times, 7/15).