Senate bill will cut
oxygen $600 million
The House of Representatives voted to postpone, for 18 months, planned physician pay cuts of 10.6% that would have taken effect July 1.
Instead, to account for the deficit created, Congress now proposes cutting reimbursement to private insurers that cover Medicare patients. The exact cost of the deficit from the physician pay-preserving bill is not clear.
Nevertheless, the House appears to have enough support to override a presidential veto. In fact, the proposal enjoys bipartisan support. President Bush, in favor of privatization in general, opposes the legislation because it reduces Medicare Advantage funding--a program that lets seniors shop for private insurance, which is reimbursed by Medicare. Insurers including UnitedHealth Group Inc., WellPoint Inc., and others provide Medicare Advantage coverage. One congressional report found that insurers are paid 13% more than it would cost the government to provide direct payment for services.
Medical associations have argued that if a physician pay cut goes through, doctors will be forced to turn away Medicare patients at a time when a large portion of the aging U.S. population enters eligibility.
The legislative effort in the House needs Senate backing and the upper chamber now becomes the focus of debate and lobbying over these important issues...
Senate Committee Action/Compromise Update
Coinciding with the House activity, Senate Finance Committee leaders reached a tentative bipartisan deal on Medicare legislation and are awaiting CBO scores according to Senate Finance Chairman Max Baucus. (Shortly after the House vote, Senate Majority Leader Reid said the Senate will take up the House bill, despite news of the possible Senate deal.)
Baucus did not discuss details of the compromise but industry sources say the compromise prevents the 10.6 percent Medicare physician pay cut for 18 months by giving physicians a 0.5 percent Medicare payment increase in 2008 and freezing payments in 2009.
Industry sources said the compromise measure is not paid for with reductions in government payments for Medicare Advantage private fee-for-service plans -- a provision included in Baucus' original bill and in the House-passed measure that attracted an administration veto threat.
The Senate agreement will further cut payments to plans for duplicative Medicare Advantage indirect medical education.
DME Delayed/Oxygen Cuts Posited
The Senate compromise also includes a $600 million cut in Medicare payments for oxygen suppliers on top of a 9.5 percent cut imposed to pay for a Medicare durable medical equipment (DME) competitive bidding program delay. When Baucus was attempting to garner support during the Senate's cloture vote on his original bill, he offered to eliminate the stand-alone oxygen cut, but the offer was not extended through negotiations. Oxygen suppliers are showing that the two cuts in the compromise language, coupled with a cut implemented by the Deficit Reduction Act, would result in a 33 percent reduction in Medicare payments to oxygen providers next year. When the Senate recently took up Baucus' original bill, Democrats came close to gaining enough Republicans to limit debate on the measure. House Ways and Means Chairman Charles Rangel said the House vote puts the chamber on record regardless of what happens in the Senate.
The delay in the Medicare DME bidding program puts the brakes on a long-planned (and long-opposed by some) effort to pre-qualify suppliers of DME to Medicare beneficiaries.
The New York Times reported that Medicare pays nearly double the cost of home-use equipment compared to prices readily available online. However suppliers harmed by not being among winning bidders claim that their value extends beyond equipment because they also provide service and education for patients.
DOTmed Online News has covered the DME debate extensively. Read about the topic at:
https://www.dotmed.com/news/story/6215/
https://www.dotmed.com/news/story/6043/
https://www.dotmed.com/news/story/5973/
