Long-Term Fix Is Elusive in Medicare Payments

Senator Edward M. Kennedy of Massachusetts made a surprise return to the Senate last week and helped Democrats pass a bill to rescind a 10.6 percent cut in Medicare payments to doctors. The White House says President Bush will veto the bill because it would also reduce subsidies paid to insurance companies that care for some Medicare beneficiaries.

Democratic leaders believe they have the two-thirds majority needed to override a veto. The bill was passed 355 to 59 in the House, and the crucial vote in the Senate was 69 to 30.

The bill would give doctors an 18-month reprieve. But it leaves in place the current system of paying doctors, based on a fee schedule that sets payment rates for 7,000 different services.

“The physician payment mechanism is hands down the most broken part of Medicare,” said Gail R. Wilensky, who was administrator of the Medicare agency under the first President Bush. “We desperately need a new way to reimburse doctors. I fear that the need for fundamental change will be kicked down the road once the latest crisis has passed.”

Senator John D. Rockefeller IV, Democrat of West Virginia, agreed. “We must find a long-term solution,” he said.

Mr. Rockefeller and other lawmakers are pleading with physicians’ groups to come forward with a comprehensive proposal. But that could be difficult because any new formula would almost surely produce winners and losers among doctors.

Dr. Thomas R. Russell, executive director of the American College of Surgeons, said, “We absolutely want to work with Congress to get this fixed in the next 18 months.”

“Doctors who are responsible for the rapid growth in certain areas, like testing and imaging procedures, need to bring those expenses under control,” Dr. Russell said.

But radiologists say it is unfair to hold them accountable for all the growth in imaging services because the services are usually ordered by other doctors, like orthopedic surgeons and internists.

Senator Debbie Stabenow, Democrat of Michigan, called the current formula severely flawed. She said it cut payments to doctors about 5 percent in 2002 and would have caused cuts every year since then if Congress had not intervened.

The ACP (disclosure I am a member of the Board of Regents) has actively lobbied for such reform – Senate passes legislation to reverse Medicare payment cut.

I suspect that the first 6 months after the election we will see more action on health care reform than any time we can remember.  Clearly fixing payment is a major agenda item, although I suspect we will see even more widespread initiatives.

Related posts:

1. Wow – I finally understand the SGR mess
2. Universal health care will require fair pay for primary care
3. How good is the Medicare infection policy?
4. Will Congress fix their mess?
5. Geography payment wars

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