Senate blocks Medicare cuts in physicians' pay

By James R. Carroll and Patrick Howington

WASHINGTON — With unexpected help from ailing Sen. Edward Kennedy, the Senate voted yesterday to prevent a 10.6 percent cut in doctors’ Medicare payments that Kentucky and Indiana physicians had warned could end some services.

The 69-30 vote sent the measure to President Bush, who has vowed to veto it. But the Senate and House, which earlier voted 355-59 in favor of the measure, have enough votes to override a veto.

The Senate-passed measure will block the reduction in Medicare payments to physicians, freezing payments at the current levels. In January, physicians will receive a 1.1 percent increase in payments.

The fight over the Medicare bill pitted Senate Democrats, the AARP and the American Medical Association against many Senate Republicans, HMOs and health-insurance companies like Louisville-based Humana.

The day’s key vote was interrupted by Kennedy, who had not been in the Senate since May, while undergoing treatment for a brain tumor.

“Aye,” Kennedy said, casting his vote with his upright thumb in the air.

The senators in the crowded chamber burst into shouts and cheers for Kennedy, who was accompanied by Sen. Barack Obama of Illinois, the likely Democratic presidential nominee; Kennedy’s son, Rep. Patrick Kennedy, D-R.I.; and Sen. John Kerry, D-Mass.

Republicans joined in the applause, as did the visitors’ gallery overlooking the Senate floor. Kennedy’s wife, Vicki, and his niece, Caroline Kennedy, were in the gallery.

Kennedy left quickly after casting his vote, returning to his home in Hyannisport, Mass.

“That was a little drama,” Sen. Claire McCaskill, D-Mo., who presided over the vote, said into her microphone.

On June 26, the Senate tried to take up the Medicare measure but fell one vote short of the 60 needed. Kennedy provided the 60th vote yesterday.

Afterward, Republican opposition to the measure collapsed, with several joining Democrats in passing it.

“I return to the Senate today to keep a promise to our senior citizens — and that’s to protect Medicare,” Kennedy said in a statement. “Win, lose or draw, I wanted to be here. I wasn’t going to take the chance that my vote could make the difference.”

During the debate, Senate Majority Leader Harry Reid, D-Nev., said the Republicans opposed to the bill were protecting the interests of the insurance companies and HMOs.

“The only action the Republicans have taken on this Medicare issue is delay, delay, delay,” Reid said.

Senate Minority Leader Mitch McConnell, R-Ky., said the Democratic majority had taken an “all or nothing” approach to the measure. Democrats had declined a different bipartisan measure and refused to allow any long-term or short-term extensions to allow continued negotiations.

“Yet they’re not to blame for this Medicare cut going into effect?” McConnell asked.

Sens. Jim Bunning, R-Ky., and Richard Lugar, R-Ind., opposed the bill; Sen. Evan Bayh, D-Ind., voted for it.

Doctors refuse patients

The 10.6 percent cut was supposed to take effect July 1, followed by a scheduled 5 percent cut in 2009. They would have cost Kentucky doctors $190million and Indiana doctors $260million over the next 18 months, according to the AMA.

It also could have prompted many doctors to stop accepting new Medicare patients, the AMA said, citing a survey of 8,955 physicians last year. Sixty percent said they would limit their number of new Medicare patients if the cut was made.

Some are doing that already.

Dr. David Zoeller, a family physician in Elizabethtown, Ky., said he stopped taking new Medicare patients about two months ago, tired of the annual threat of a pay cut.

“I’m actually so tired of this, getting yanked around every year,” he said.

Zoeller continues to treat his current Medicare patients, who make up about 30 percent of his cases. But he turns away new ones.

“It’s hard to say no,” Zoeller acknowledged. But the solo practitioner needs to pay his employees, and under Medicare “our expenses are going up, but the income goes down.”

Losing more Medicare doctors could be particularly devastating in Kentucky, a state with an above-average proportion of Medicare patients and that already faces a physician shortage, said Dr. Bill Monnig, a Northern Kentucky urologist who is national legislative chairman for the Kentucky Medical Association.

Older Kentucky doctors whose Medicare pay keeps dropping are likely to ask, “Why am I practicing medicine? It’s more reasonable for me to retire,” he said. “And I think that’s what you’ll see if this keeps going.”

Access would diminish

The Indiana State Medical Association, which represents about 8,400 doctors, and AARP Indiana both had urged Lugar to reconsider his opposition to the bill. Without Senate action, Hoosiers faced the possibility of less access to health care, the groups said.

Lugar and other Republicans “are in favor of the doctor fix but this particular one would have increased costs to senior citizens by taking money out of the Medicare Advantage program,” said Lugar spokesman Andy Fisher. The program encourages using private insurance at a savings to consumers.

Sen. Tom Coburn, R-Okla., told his colleagues that the bill would cut the Advantage program, denying it to 2.3million seniors. Medicare patients also will pay $200million more in co-payments, he said.

The bill restores physicians’ pay by taking some funding from Medicare Advantage plans. The plans, sold by private insurers including Louisville’s Humana, cover about 10million of Medicare’ 44million beneficiaries.

Medicare Advantage has come under fire from Democrats because it costs the government more per person than traditional Medicare coverage.

But Republicans and President Bush have opposed funding cuts for the program.

Humana, the nation’s second-largest Medicare Advantage plan provider, said the program is very popular with seniors and reducing its funding would cause a cutback in enrollees’ benefits.

“Humana believes physician reimbursement levels should not be reduced. However, the way to stabilize funding should not involve penalizing our nation’s seniors,” the company said in a statement issued before yesterday’s vote.

The Congressional Budget Office projected that insurers would get about $13.5billion less in Medicare payments over the next five years.

Citigroup analyst Paul Heldman expects Humana, Aetna Inc., and Coventry Health Care Inc. to be hardest hit by the changes. All three companies have a large number of patients enrolled in Medicare Advantage plans targeted by the legislation. The payment reductions are not expected to take effect before 2010.

However, a representative of AARP Kentucky said it’s more important to shore up doctors’ Medicare pay than to protect Medicare Advantage.

Frank Hatfield, 75, a member of the organization’s executive council, said he thinks Medicare is best run by the government, not by private companies.

“When you get the private insurers in it … there’s a profit incentive there that you don’t have otherwise,” said Hatfield, a former Bullitt County school superintendent.

Reporter James R. Carroll can be reached at (202) 906-8141.

Reporter Patrick Howington can be reached at (502) 582-4229. Courier-Journal reporter Lesley Stedman Weidenbener and the Associated Press contributed to this story.

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