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Medicare pay overhaul heats up as health reform moves to back burner

In a newly uncertain political environment, physicians and seniors try to refocus debate on Medicare doctor pay. Without action, cuts will take effect March 1.

By Chris Silva — Posted Feb. 1, 2010

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With a comprehensive health system reform effort effectively on hold after the victory of a Republican Senate candidate in Massachusetts, physician organizations are mobilizing to prevent Medicare doctor payment reform from also becoming a casualty of the altered political landscape on Capitol Hill.

The American Medical Association, other physician organizations and seniors groups were hoping to follow health reform passage with a long-term solution to the Medicare physician payment system, which is primed for a 21.2% cut starting March 1. But momentum on the broader reform effort came to a grinding halt when Massachusetts state Sen. Scott Brown defeated state Attorney General Martha Coakley in a Jan. 19 special election for the Senate seat vacated by the death of Democratic Sen. Edward Kennedy last August.

Without the 60 votes necessary to overcome the threat of a Republican filibuster in the Senate, prospects for both the health reform bill and a permanent Medicare payment overhaul have become murkier. After the special election, Senate lawmakers floated a proposed five-year patch on Medicare physician pay. At this article's deadline, leaders were considering whether to insert the provision into legislation that would raise the national debt ceiling, a measure the House approved in December.

But in a Jan. 21 news conference with AARP and the Military Officers Assn. of America, the AMA reiterated that it does not support any more short-term repairs to the broken sustainable growth rate formula. The groups hosted the event to warn of access problems for seniors and military families if the 21.2% cut goes through. They also unveiled new television ads that call on the Senate to adopt a House-passed permanent overhaul of the pay system.

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AMA Immediate Past President Nancy H. Nielsen, MD, PhD, stresses to reporters that it's time for Congress to stop temporary repairs and tackle a complete overhaul of the Medicare physician payment system. Photo courtesy of AMA / Sam Hurd

"We absolutely do not want a temporary fix," said Nancy H. Nielsen, MD, PhD, AMA immediate past president. "The price tag grows every time you do that. That's why we are in the $200 billion price tag range right now. That is not fiscally responsible. We do not want a five-year fix, or any short-term fix. We want a permanent fix."

AARP said nearly 90% of people ages 50 and older tell the organization they are concerned that the current formula threatens access to care.

"The House has done its part by passing a permanent fix," said AARP Executive Vice President Nancy LeaMond. "Now it's the Senate's turn."

But the upper chamber, which rejected a similar solution last year, still does not appear likely to approve the House measure, said William Oldaker, a partner of Oldaker, Belair & Wittie, a Washington, D.C.-based law firm that specializes in government relations. "I don't think physicians are going to be able to do anything better than a five-year freeze."

Taking a breather

Brown's victory not only reduced the Senate Democratic caucus to 59, but it also took the wind out of the sails of Democratic negotiators who were closing the distance between the House- and Senate-passed reform bills. While the development does not kill the reform effort outright, it has put it on hold while Democrats mull what they consider less-desirable alternatives to their original plans.

The House could just adopt the Senate-approved measure on its own, but House Speaker Nancy Pelosi (D, Calif.) has said she does not have the votes to make it happen. Senate Democrats could use a parliamentary tactic known as reconciliation to pass a more limited reform measure, whether as part of a deal to revise portions of the broader Senate bill that the House opposes or as a stand-alone bill. That tactic would allow simple majority approval in the Senate.

But some policy experts said it was unlikely lawmakers would take that approach, as reconciliation is a complex procedure with a limited scope.

"The problem with reconciliation is that it's for tax and budget items," said Robert Moffit, PhD, director of the Center for Health Policy at the Heritage Foundation, a conservative think tank in Washington, D.C. "The provisions would be subject to a point of order and could be stripped if they're not compatible with reconciliation rules. If you go that route, you could have a bill that ends up looking like Swiss cheese and could actually make the health system worse."

Another option would be for the House to send the Senate a new bill with popular reform measures that appear to enjoy more bipartisan support. These include imposing limited cost controls, ending insurance denials based on preexisting conditions, establishing minimum benefits standards, and prohibiting lifetime and annual limits on benefits, said Rep. Raul Grijalva (D, Ariz.). "This approach ensures that much of what we sought to achieve with health care reform will be enacted without the need to re-engage a debate on how to fix the irredeemable Senate bill in the face of unrelenting Republican obstructionism."

But several health advocates, including the AMA, insisted that comprehensive health reform could -- and should -- still be achieved. AMA President J. James Rohack, MD, sent a Jan. 26 letter to President Obama and Congress renewing a call to enact comprehensive reform legislation, repeal the Medicare physician payment formula, implement medical liability reforms and standardize insurance claims processing requirements.

"While the Senate election in Massachusetts altered the political landscape, the issues that created the pressure to enact reforms must still be addressed," Dr. Rohack wrote.

Still, the uncertain fate of reform in the aftermath of the Massachusetts election already has led some to declare that the related issue of permanent Medicare physician pay reform is also on life support.

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