Baucus Seeks Medicare Action

In Brief: While the Senate Finance Committee moves closer toward introducing a Medicare bill to address the physician payment crisis, national medical societies continue to try to convince Congress to correct major flaws in the Medicare program structure.

Without congressional action, physicians are universally concerned that Medicare physician payment rates will be reduced by 10.6% on July 1, 2008, and by an additional 5% on January 1, 2009. It is critical that Congress takes action to replace the next 18 months of cuts with positive updates based on practice cost increases. At the time of this writing, Senate Finance Committee Chairman Max Baucus (D-Mont) had expected to get a Medicare bill to the Senate floor by mid-May to address the physician payment update. Last year, Congress passed the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA), which contained a 0.5% payment increase that expires June 30, 2008. The law also postponed a 10.1% cut that had been scheduled to take effect January 1, 2008.

The committee’s bill could have an 18-month fix that would create a 20% pay cut in 2010. Senator Baucus seeks to prevent that cut. Also he wants to continue to achieve the following in the Medicare legislation:

• Tie payments to quality measure reporting

• Increase payments to primary care physicians

• Include e-prescribing incentives

• Address Relative Value Scale Update Committee (RUC) reform

• Extend the “medical home” demonstration project on coordinated care for underserved areas in the Senate package

Specialty medical groups have raised concerns about the “medical home” demonstration, a primary care provision which may be paid for through cuts to other specialties as recommended by the Medicare Payment Advisory Commission (MedPAC). Senator Baucus indicated he does not expect a large Medicare package to pass because of the cost of an 18-month physician payment fix and the Senate’s pay-as-you-go requirements. The bill would cost roughly $8 billion over five years, which barely covers the cost of an 18-month reimbursement “patch” and leaves little room for extra provisions. Although the Senate Finance Committee considered several Medicaid provisions the last time it negotiated a bill, the chairman said he is unsure whether Medicaid will be addressed in the Medicare bill.

AAPM&R will continue to strategize with other medical societies and keep members informed of developments. For more information contact Suzanne Butler, JD, manager of legislative affairs, at sbutler@aapmr.org.