Kaiser Daily Health Policy Report

Administration News | White House Renews Veto Threat of Medicare Physician Payment Bill Because of Medicare Advantage Cuts

 

      President Bush intends to veto legislation (HR 6331) that would delay a 10.6% reduction to Medicare physician fees that was scheduled to take effect last week, despite the measure passing both chambers by veto-proof majorities, the Los Angeles Times reports (Gaouette, Los Angeles Times, 7/11). The Senate on Wednesday approved the measure after it failed to receive enough votes for cloture on June 26. CMS provided Congress with more time to act on blocking the fee reduction, freezing physician fee rates until July 15 through an administrative measure. The bill is similar to a measure (S 3101) proposed by Senate Finance Committee Chair Max Baucus (D-Mont.) that did not pass in the Senate (Kaiser Daily Health Policy Report, 7/10).

White House spokesperson Tony Fratto on Thursday said that Bush will veto the measure because it would reduce payments to providers of Medicare Advantage plans (Los Angeles Times, 7/11). "Taking choices away from seniors in order to pay for the reimbursement for physicians is the wrong way to pass this bill and to extend the reimbursements that we want to see physicians get," Fratto said (Freking, AP/Contra Costa Times, 7/10). Fratto in an e-mail wrote that he is unsure when Bush will take action on the measure (Edney, CongressDaily, 7/10).

Bush has opposed any reductions in payments to MA plans, which are paid on average 12% more than traditional Medicare, according to the Medicare Payment Advisory Commission (Lipman, Cox/Lexington Herald-Leader, 7/11). The measure would offset the 18-month delay to the reduction in physician fees by reducing payments to MA providers by about $13.5 billion over five years, the AP/Contra Costa Times reports. Administration officials estimate the bill would reduce MA plan enrollment to 12 million beneficiaries in five years, compared with the 14.3 million previously estimated. There currently are about nine million beneficiaries enrolled in MA plans, according to the AP/Times (AP/Contra Costa Times, 7/10).

Officials from the American Medical Association have said that 60% of physicians would limit the number of Medicare patients they will see if the fee cut goes into effect. In addition, military groups said the cut likely would affect active and retired service members' access to doctors because Tricare, the military health care system, bases its payment rates on Medicare's. James Rohack, president-elect of AMA, said, "If the president vetoes the bill, he's taking away the ability of patients to see their physicians, and the ultimate choice is whether a physician is able to see patients" (Los Angeles Times, 7/11).
 

Democrats Say Congress Would Override Veto

House Speaker Nancy Pelosi (D-Calif.) said that lawmakers "rest assured will make very sure that this bill becomes law through a veto override," should Bush veto it (Los Angeles Times, 7/11). If Bush vetoes the measure, the House would hold the first override vote, followed by the Senate. The House on June 24 passed the bill, 355-59, more than the two-thirds majority required for a veto override. The Senate on Wednesday passed the measure 69-30, after nine Republican senators who had previously voted against the measure switched their votes. In all, 18 Republicans voted for the bill, despite pressure from Bush to oppose the legislation (Armstrong, CQ Today, 7/10). "I can't imagine why the president would veto this bill because the writing is on the wall," Senate Majority Leader Harry Reid (D-Nev.) said (AP/Contra Costa Times, 7/10).

According to CQ Today, "Vote-switchers in either chamber likely would be hammered by advocacy groups." Advocacy groups have said they would put more pressure on Republican lawmakers if either chamber fails to override a veto, CQ Today reports. Several groups over the Fourth of July recess aired advertisements targeting Republican senators who voted against the measure on June 26.
 

Republicans Confirm Veto Override Votes

Sen. Bob Corker (R-Tenn.), one of the nine Republicans who switched their votes, said he would vote to override a veto of the measure, spokesperson Laura Lefler said (CQ Today, 7/10). Corker and Sen. Lamar Alexander (R-Tenn.), who also switched his vote on Wednesday, dropped their opposition to the measure after Senate leadership pledged to take action on a Medicaid payment issue at Regional Medical Center at Memphis. Alexander said he has not yet decided whether he will vote to override a veto. Sen. Johnny Isakson (R-Ga.), who also changed his vote, said he would vote to override a veto (Young, The Hill, 7/10). The Dallas Morning News reports that Texas Sens. John Cornyn (R) and Kay Bailey Hutchinson (R) also said they would vote to override a veto. They both "reluctantly" switched their votes to ensure beneficiaries' access to physicians, according to the Morning News (Garrett, Dallas Morning News, 7/11). Sen. Mel Martinez (R-Fla.), who switched his vote on Wednesday, in a statement said, "The measure we moved forward today does not provide the kind of solution doctors deserve, but this is the only option to stop doctors in Florida from having their pay cut by 10.6%. It is also the only option to ensure that seniors continue to have uninterrupted access to health care" (Jaffe, Florida Health News, 7/10).

Timing Issues

CQ Today reports that if Bush delays action on the bill past July 15, a date to which CMS has pushed back filing reimbursement forms, the cuts could go into effect, "infuriating doctors." According to CQ Today, advocacy groups already have begun pressuring Bush to "accept what they see as inevitable and quickly sign the bill," according to CQ Today. However, if Bush quickly vetoes the measure, it will give both chambers enough time to potentially override the veto (CQ Today, 7/10).

Editorial, Opinion Piece

Two newspapers published an editorial and an opinion piece related to the Medicare bill. Summaries appear below.

 

• Houston Chronicle: A "shameless attempt" by Republicans to halt the Senate from voting on delaying a 10.6% reduction in Medicare physician fees "threatened to worsen an exodus of physicians from Medicare," according to a Chronicle editorial. According to the Chronicle, nearly 40% of physicians in Texas currently refuse to accept new Medicare patients. The Chronicle concludes, "Now that the crisis has been averted, Congress should get to work on comprehensive legislation that will devise a realistic formula for adjusting Medicare physician payments to the prevailing market and providing more incentives for doctors to stay with the program" (Houston Chronicle, 7/10).
  
   
• Paul Krugman, New York Times: Wednesday's vote was bigger than "the dramatic appearance on the Senate floor" of Sen. Edward Kennedy (D-Mass.), who is undergoing treatment for brain cancer, columnist Krugman writes in the Times, adding, "It was the first major health care victory that Democrats have won in a long time." Krugman continues that the vote "was enormously encouraging for advocates of universal health care." The vote "was really about ... the fight against creeping privatization," and Democrats "finally took a stand," Krugman writes. He writes that the vote shows that Democrats can use public support to secure Republican votes on health care-related issues, which could be used if presumptive Democratic presidential nominee Sen. Barack Obama (Ill.) wins the presidency and presents a universal health care plan to Congress. Through this tactic, Democrats can get the 60 votes needed in the Senate to override a filibuster, Krugman writes. He concludes, "A lot can still go wrong with this vision. But the odds of achieving universal health care, soon, look a lot higher than they did just a couple of weeks ago" (Krugman, New York Times, 7/11).