Senate Majority Leader Files To Invoke Cloture on Medicare Bill That Would Stall Physician Fee Cut

Senate Majority Leader Harry Reid (D-Nev.) on Tuesday filed to invoke cloture on a bill (S 3101) that would delay for 18 months a 10.6% cut in Medicare physician fees scheduled to take effect on July 1 and increase payments by 1.1%, CongressDaily reports (Edney, CongressDaily, 6/11). The legislation, introduced by Senate Finance Committee Chair Max Baucus (D-Mont.), would cost about $20 billion and includes a number of other provisions. Among the provisions is one that would promote electronic prescribing and another that would 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. The bill also would reduce the copayments that beneficiaries pay for mental health services from 50% to 20%.

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. 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 (Kaiser Daily Health Policy Report, 6/9).

Prospects
According to CongressDaily, "Whether enough Republicans will sign on to [Baucus'] bill to end debate is unclear." Sources say that physician groups are pushing Republicans to support the measure, CongressDaily reports. So far, Sens. Olympia Snowe (R-Maine) and Gordon Smith (R-Ore.) have publicly supported the legislation. Finance Committee ranking member Chuck Grassley (R-Iowa), who is planning on introducing a competing measure, on Tuesday said he thinks Republicans will block cloture. Grassley's bill, which he will introduce after a Congressional Budget Office scoring, would contain different offsets than Baucus' bill (CongressDaily, 6/11). The Bush administration and Republicans have objected to Baucus' proposed cuts to MA plans to finance the measure.

Deadline Looming
CMS has set an administrative deadline of June 16 for the measure. Shawn Martin, government relations director for the American Osteopathic Association, said that CMS must program the cut into its payment systems if legislation is not signed by that date. Jeff Nelligan, a CMS spokesperson, said, "If legislation is enacted after June 16, CMS will work to ensure that all providers are paid at appropriate rates," adding, "But depending on the scope of the legislation, there may be some reprocessing of claims" (Reichard, CQ HealthBeat, 6/10). Baucus said it is unclear if the measure would be finished by June 30 (CongressDaily, 6/11).