Lawmakers craft reprieve for medical pay

By KEVIN FREKING, Associated Press Writer

Physicians will get a six-month reprieve from a 10 percent rate cut when treating Medicare patients under legislation that passed the Senate on Tuesday.

The pay cut for doctors had been scheduled to take effect Jan. 1. Doctors had warned that a cut in reimbursement rates would lead to physicians taking on fewer new Medicare patients. Instead, they’ll get a 0.5 percent raise when they treat the elderly and disabled.

The legislation, crafted by leaders of the Senate Finance Committee and approved on a voice vote, also would extend funding for a popular children’s health insurance program through March 2009.

Large majorities in both chambers supported spending an additional $35 billion on the State Children’s Health Insurance Program, bringing total spending to $60 billion over five years. President Bush twice vetoed expansions of the program; supporters were unable to muster enough support in the House to overcome the first veto. Supporters will try to override the second veto when they return in January.

Some advocacy groups, such as the AARP, described the Medicare legislation that passed the Senate as woefully inadequate. They had hoped that Congress would substantially lower payments to private insurers serving Medicare beneficiaries. The savings from those cuts would be used to pay for other programs that they wanted, such as increasing the number of people eligible for the low-income subsidy in the Medicare drug benefit.

“The influence of the insurance lobby once again ruled the day,” said Barbara B. Kennelly, president and CEO of The National Committee to Preserve Social Security and Medicare.

Insurers argued that any cut in their reimbursement rates would result in benefit cuts for many of the 8 million elderly getting their health coverage through managed care.

Officials with the American Medical Association said that a six-month fix creates great uncertainty for Medicare patients and physicians. The trade group for doctors urged lawmakers to shelve the funding formula that has annually caused lawmakers to pass legislation avoiding a Medicare pay cut.

Under the compromise, lawmakers would trim $1.5 billion from a fund established for certain insurers that entered previously unserved regions. But that’s a far cry from the tens of billions of dollars that Democrats proposed trimming.

The higher reimbursement rates for doctors is expected to cost about $6 billion.

Lawmakers would offset that cost primarily by freezing payments for inpatient rehabilitation care and for prescription drugs delivered by physicians through Medicare Part B.

Inpatient rehabilitation facilities commonly treat patients suffering from stroke, arthritis and spinal cord or brain injuries. The medicines delivered by physicians are the kind routinely provided at a doctor’s office, such as injections to treat cancer or anemia.

Sen. Charles Grassley, R-Iowa, said the extension of the children’s health program gives states more certainty about funding levels for the program. The states will get enough money to maintain their current enrollment of more than 6 million people. A one-year extension would have made the topic another hot-button issue for lawmakers to deal with before the general election.

Grassley acknowledged that the Medicare package fell far short of what many lawmakers wanted.

“This is a disappointment for many of us,” he said. “The purpose of moving forward with a six-month package now is to provide the opportunity for the Finance Committee to address these priorities next year.”
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