Medicare Cuts Loom

The Senate introduced two bills in an attempt to preserve the Medicare Physician Fee Schedule, which has been threatened with cuts every year since 2003; however, as of press time, both pieces of legislation appear to be dead in the water.

The first bill, S.3101 (the Medicare Improvement for Patients and Providers Act of 2008), introduced by Sen. Max Baucus (D-Mich.) on June 6, 2008, would have “amend[ed] titles XVIII and XIX of the Social Security Act to extend expiring provisions under the Medicare program, to improve beneficiary access to preventive and mental health services, to enhance low-income benefit programs, and to maintain access to care in rural areas, including pharmacy access, and for other purposes.”

Unfortunately, the last major action taken on S.3101 was the withdrawal of a motion to proceed to consideration of the measure on the Senate floor, falling short of the 60 votes needed for debate. This took place on June 17, 2008, essentially stalling the bill in its tracks.

The proposed legislation would have continued the Medicare Physician Fee Schedule at its current rate through the end of this year and granted an additional 1.1 percent positive update for 2009. In addition, the Physician Quality Reporting Improvement Initiative (PQRI) would have been extended for two years and PQRI incentive payments would have increased to 2 percent. The bill sought to impose budget neutrality (i.e., a requirement for positive updates to pay for themselves) by applying “such budget-neutrality adjustments to the conversion factor otherwise determined for years beginning with 2009.”

The second bill was introduced by a longtime champion of chiropractic, Sen. Charles Grassley (R-Iowa). S.3118 (Preserving Access to Medicare Act of 2008) was introduced on June 11, 2008. Similar to the bill introduced by Sen. Baucus, this bill proposed to “amend titles XVIII and XIX of the Social Security Act to preserve beneficiary access to care by preventing a reduction in the Medicare physician fee schedule, to improve the quality of care by advancing value-based purchasing, electronic health records, and electronic prescribing, and to maintain and improve access to care in rural areas, and for other purposes.”

Because of the failure of the Baucus bill, Grassley’s legislation is likely stalled as well. Sen. Grassley expressed his displeasure on his Web site: “The Democratic leaders’ bill failed. They knew it would. The Democratic leaders wouldn’t even allow a Senate vote on an alternative that could be signed into law immediately. Their political exercise wasted time and taxpayers’ money. You might as well take a match to a pile of tax dollars. Now, Congress has 18 days left to make sure doctors serving Medicare patients don’t get hit with a draconian cut that would put them in the position of not being able to serve seniors. Lawmakers need to work together to fix the Medicare physician payment problem, address Medicare Advantage problems, and make sure we don’t create new problems for Medicare’s already troubled fiscal condition by overreaching. I hope that this failed vote will get us to the negotiating table.”

The Grassley bill also proposed keeping the Medicare Physician Fee Schedule at its current rate, and that for 2009, “the update to the single conversion factor shall be 1.1 percent.” Grassley also proposed the same extensions to the PQRI.

The main difference between the two bills was in how they proposed to achieve all-important budget neutrality. Grassley proposed an incentive system: “The Secretary of Health and Human Services (in this section referred to as the ิSecretary’) shall design and implement a budget-neutral system for use in the Medicare program under title XVIII of the Social Security Act under which a portion of the payments that would otherwise be made under such program to some or all classes of individuals and entities furnishing items or services to beneficiaries of such program would be based on the quality of their performance.”

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