Reversal of Medicare Physician Reimbursement Reduction Possible This Year

Congress this week might approve a provision that would reverse a scheduled reduction in Medicare physician reimbursements, according to legislative aides, the Washington Post reports (Weisman, Washington Post, 12/3). Medicare physician reimbursements will decrease by 5.1% in January 2007 without congressional action.

Legislative aides said lawmakers this week -- likely the final week of the 109th Congress -- might attach the provision to tax legislation (Washington Post, 12/3). The legislation has "been tied up in disputes over other legislation all year" and might "run into trouble again if lawmakers try to use the package to gain approval of more controversial items," the New York Times reports (Hulse, New York Times, 12/4).

According to a Republican aide, the provision on Medicare physician reimbursements likely would maintain current rates for one year, although a 0.5% to 1% increase is possible. The Congressional Budget Office estimates that a 1% increase in Medicare physician reimbursements would cost $13 billion over five years.

According to CQ Today, last week "there were indications that the payment proposal was ballooning to include a number of other health care provisions, raising doubts about whether it could be cleared quickly in the Senate." The other health care provisions included measures to address expected budget deficits for state SCHIP programs, increase Medicare reimbursements for rural home health agencies, waive the late enrollment penalty for the Medicare prescription drug benefit and geographically reclassify some hospitals from rural to urban to increase their Medicare reimbursements (Armstrong, CQ Today, 12/1).

In related news, Congress this week likely will approve a continuing resolution to finance most federal agencies until mid-February 2007, the Times reports. Congress to date has passed only two of 11 fiscal year 2007 appropriations bills, those for the Department of Defense and the Department of Homeland Security (New York Times, 12/4). According to Roll Call, House and Senate appropriations aides hope to avoid "extraneous issues" in the continuing resolution by "passing a measure that keeps the government funded through mid-February at the lowest level of either the House-passed bills or last year's level."

A Senate Republican aide said the FY 2007 Military Construction-VA appropriations bill might receive approval with the continuing resolution, provided that no provisions are added to the bill (Pierce, Roll Call, 12/4). CongressDaily reports that "conservatives say they support the bill but have not received assurances that appropriators would keep it 'clean' of additional spending or earmarks, even though appropriators argue they have repeatedly provided such assurances" (CongressDaily, 12/4).

Incoming House Ways and Means Health Subcommittee Chair Pete Stark (D-Calif.) on Friday said he remains uncertain about whether he would support a reversal of the scheduled reduction in Medicare physician reimbursements in the event that Congress does not take action this year.

In addition, Stark commented on legislation to allow Medicare to negotiate directly with pharmaceutical companies for discounts on medications, a practice currently banned under the 2003 Medicare law.

He added that legislation to establish a Medicare prescription drug plan administered by the federal government to compete with private plans likely could not avoid a veto from President Bush and that Democrats likely cannot "eliminate the doughnut hole" coverage gap in the prescription drug benefit (Reichard, CQ HealthBeat, 12/1).

The failure of the 109th Congress to pass most of the FY 2007 appropriations bills "is inexcusable" and "creates enormous problems across a broad spectrum of federal agencies, which have no assurance about what their final spending allowances will be," a Post editorial states.

The editorial concludes, "The fiscal 2008 budget will arrive on lawmakers' desks in early February, most likely along with an oversized emergency spending request for operations in Iraq and Afghanistan. Getting all that business done will be hard enough for the 110th Congress without having to pull clean-up duty for the 109th" (Washington Post, 12/4).