Senate Finance Committee Chair Baucus Introduces Bill To Delay Reduction in Medicare Physician Reimbursements
Senate Finance Committee Chair Max Baucus (D-Mont.) on Friday introduced a bill (S 3101) that would delay for 18 months a 10.6% reduction in Medicare physician reimbursements scheduled to take effect on July 1 and increase payments by 1.1%, The Hill reports.The legislation, which includes a number of other provisions, would cost about $20 billion. The bill includes provisions to promote electronic prescribing and expand rural health care programs. In addition, the legislation would require Medicare to promptly pay pharmacies for medication dispensed to beneficiaries and impose new marketing restrictions for Medicare Advantage plans (Young, The Hill, 6/6). The bill would reduce the copayments that beneficiaries pay for mental health services from 50% to 20% (AP/Albany Times Union, 6/6).
Baucus and Senate Majority Leader Harry Reid (D-Nev.) agreed to bypass a committee mark up of the legislation, and the bill likely will reach the Senate floor by mid-week (Armstrong, CQ Today, 6/6).
Offsets
The legislation includes reductions to MA spending to offset the cost. The bill would reduce indirect medical education payments under MA and decrease spending for a "stabilization fund" used to encourage private health insurers to participate (The Hill, 6/6). In addition, the legislation would limit a process called "deeming," under which private health insurers force health care providers to participate in MA plans when they treat beneficiaries enrolled in those plans. The bill also would reduce Medicare reimbursements to oxygen providers, which many Democrats "believe ... are overpaid," according to CQ Today (CQ Today, 6/6).
Prospects
According to The Hill, although "Congress is under considerable pressure to prevent this reduction and preserve beneficiaries' access to medical services," the bill faces "several political and ideological barriers." For example, the Bush administration has threatened to veto any legislation that would reduce spending for MA (The Hill, 6/6).
In addition, Senate Finance Committee ranking member Chuck Grassley (R-Iowa) plans to introduce a rival bill on Monday, according to a spokesperson. "While many of its provisions are said to be almost identical to those in the Baucus legislation, Grassley says his bill will contain offsets -- focused on a narrow part of those private-sector plans -- that will win the approval of the White House," CQ Today reports. Grassley said that the reconciliation process between the two bills will result in the passage of more limited legislation. "That also means that the administration will likely get its way in shrinking the Baucus offsets to private-sector Medicare plans," according to CQ Today (CQ Today, 6/6).
Private Fee-For-Service Plan Enrollment
Private fee-for-service plans accounted for more than half of the enrollment growth of 800,000 in MA in the first four months of this year, according to an analysis released on Thursday by the Kaiser Family Foundation, CQ HealthBeat reports.
According to CQ HealthBeat, "continued enrollment growth would complicate efforts to alter the plans to make them less costly, as beneficiaries exert political pressure to hold onto the extra benefits they offer." House Ways and Means Health Subcommittee Chair Pete Stark (D-Calif.) said that Congress should take action to revise the plans this year. A Stark aide on Friday said that the plans are "certainly threatening the long-term health of the program." The aide said that legislation to revise the plans would not take effect until 2009, with any changes unlikely to occur until 2010 (Reichard, CQ HealthBeat, 6/6).
The analysis is available online.
