Medicare Payment Bill Falters in Senate as July 1 Deadline Looms

Senate Republicans have blocked attempts to bring a Medicare payment bill to the Senate floor for debate, thus greatly reducing the chances that Congress will be able to pass legislation blocking steep reductions in the Medicare payment rate before they take effect on July 1.

Senate Democrats and nine Republican senators were unable to muster the 60 votes needed to bring the Medicare Improvements for Patients and Providers Act of 2008, S. 3101, (at the THOMAS Web site, type S. 3101 in the search box after selecting "Bill Number") to the Senate floor for debate. The bill, which was sponsored by Sen. Max Baucus, D-Mont., chair of the Senate Finance Committee, would have blocked Medicare payment reductions scheduled to take place on July 1. It would have maintained the current Medicare payment level for the last six months of this year and provided a 1.1 percent increase in 2009.

"The AAFP is deeply disappointed that the Senate has failed to take up debate on the Medicare Improvements for Patients and Providers Act of 2008 (S. 3101)," said AAFP President Jim King, M.D., of Selmer, Tenn., in a prepared statement. "This procedural breakdown is a serious blow to the efforts on the part of the physician community to reach a consensus before the disastrous 10.6 percent Medicare physician pay cut, now scheduled to take effect July 1."

King said the impending cut will create confusion among Medicare patients as they try to determine the amount of their co-payments. In addition, it will force family physicians to cope with dramatically lower revenues at a time of skyrocketing business costs.

Sen. Charles Grassley, R-Iowa, meanwhile, has introduced a bill similar to the Baucus bill. The Preserving Access to Medicare Act of 2008, S. 3118, (at the THOMAS Web site, type S. 3118 in the search box after selecting "Bill Number") would provide an 18-month payment update, and, like the Baucus proposal, would maintain current payment levels for the rest of 2008 while providing a 1.1 percent payment increase in 2009.

In a June 16 letter to Grassley, however, AAFP Board Chair, Rick Kellerman, M.D., of Wichita, Kan., said that although the Academy appreciates Grassley's sponsorship of S. 3118 and the 18-month payment patch, the Academy does have some concerns about the bill.

In particular, Kellerman pointed out that the bill does not contain "any provision that would prohibit or restrict the practice known as 'deeming' by Medicare Advantage private fee-for-service plans. Requiring practicing physicians to accept, without any primary opportunity to review, all payment terms and other obligations to a health plan by simply seeing a patient once is unfair and inconsistent with sound business principles," said Kellerman.

In addition, he said, Grassley's measure would direct the secretary of HHS to design and implement a budget-neutral system that would base a portion of physician payments on the quality of their performance. "Because of the budget-neutral requirement, such a system would make it necessary for HHS to withhold a portion of the payment for some physicians who provide appropriate medical care," said Kellerman.

Kellerman also expressed concerns about "the absence of a provision that would increase the (payment) cap for both federally qualified health centers and rural health clinics." Kellerman noted that although the AAFP is willing to support S. 3118, he also would like to discuss the Academy's concerns with the Senator.

Although substantially similar, the Baucus and Grassley proposals differ in how they would pay for the 18-month payment patch, now estimated to cost $9.9 billion through 2010. Baucus' bill would have paid for the update by reducing subsidies for Medicare Advantage private fee-for-service plans, a provision adamantly opposed by most congressional Republicans and the Bush administration.

Grassley's proposal would lower the cost of the payment update by leaving out provisions to assist lower-income Medicare patients. Grassley and Baucus are expected to work out a compromise based on their two proposals, but it is not clear whether they can reach a compromise before the July 1 deadline or whether Congress will have enough time to pass a measure before then.

"We urge both Republicans and Democrats to immediately negotiate compromise legislation that meets the needs of both patients and the physicians who care for them," said King in the written statement. "Only by acting quickly can Congress and the administration ensure the stability of a health care program on which millions of elderly and disabled patients depend."