The LA Times has reported that the senate passeds a medicare savings bill, but the President has threated a veto.

WASHINGTON — In a floor session electrified by the appearance of Sen. Edward M. Kennedy, the critically ill Massachusetts Democrat, the Senate voted Wednesday to stave off a cut in Medicare fees to doctors who treat seniors, military personnel and their families and others.

Kennedy, a longtime champion of the federal Medicare program who underwent surgery for brain cancer last month, appeared halfway through the vote, to tears and thunderous applause from fellow senators and spectators.

Moving carefully but steadily, his broad face slightly puffy, Kennedy held up both thumbs, flashed a smile and roared his vote: "Aye."

Democrats credited Kennedy’s appearance with their 69-30 victory in what had been a closely contested and bitterly partisan dispute. A Senate vote on an identical measure failed by one vote in June.

"We got this victory because of Ted," said Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee. "He made this happen."

The vote, coming on what Democrats had cast as a key election year test, sets the stage for a showdown with President Bush, who has promised to veto the bill. But Senate leaders, buoyed by their victory, sounded confident. The bill has already passed the House by a veto-proof 355-59 vote.

"Let the president veto it," said Senate Majority Leader Harry Reid (D-Nev.). "We got overwhelming support in the House and more than enough votes to override a veto today."

In an added element of drama, the only senator to miss the vote was Sen. John McCain (R-Ariz.), his party’s presumed presidential nominee, who was campaigning in Ohio. McCain would have faced the choice of voting against the interests of seniors and active and retired military personnel, whose healthcare system is linked to Medicare, or voting against party elders at a time when he needs their support.

McCain also was absent for the June vote, in which the measure ultimately failed 58 to 40. Between the votes, nine Republicans switched sides, with 18 Republicans voting in favor overall. McCain said in a statement later Wednesday that he would have opposed the measure. Sen. Barack Obama, the Illinois Democrat and presidential candidate who accompanied Kennedy onto the Senate floor, supported the bill.

The Medicare Improvements for Patients and Providers Act of 2008 would halt a 10.6% cut in payments to physicians, scheduled to take effect July 15, and instead institute a 1.1% payment increase in 2009. The bill would also boost preventive and mental health benefits.

Bush and many Republicans opposed the bill because the funds to prevent Medicare reimbursement cuts would come from more than $12 billion set aside to pay private insurance companies that offer Medicare Advantage, including Blue Cross, Blue Shield and Humana.

The American Medical Assn. estimates that without the legislation, 60% of U.S. doctors will be forced to limit the number of new Medicare patients they treat.

Groups representing military personnel say the cut would particularly hurt the 9.2 million active and retired personnel and their family members in the military’s Tricare system, which uses payment rates set by Medicare.

The annual cuts in Medicare reimbursement rates for doctors stem from 1990s legislation intended to lower the federal deficit. The Medicare reductions were supposed to occur in small increments every year, but Congress has generally canceled them. The result is that the small cuts have become cumulative — now totaling over 10% — but Congress has not rewritten or repealed the requirement for the cuts.

Though both sides agree that the cuts in Medicare reimbursements should be prevented, they do not agree on how.

Insurance firms and Republicans say the cuts in Wednesday’s bill would lead to benefit reductions for seniors who rely on the private Medicare Advantage program — about 20% of the nation’s 44 million Medicare beneficiaries.

Medical groups countered that the cuts to private companies would largely eliminate waste because private insurers charge the government, on average, 12% to 17% more than the Medicare program charges.

"If they cut services to seniors, it’s because they choose to, rather than cut advertising or profits," said Maria Freese of the National Committee to Preserve Social Security and Medicare.

Medical groups, which had lobbied hard for the bill, celebrated its passage.

Doctors welcomed Wednesday’s vote as a small reprieve from financial pressures that were leading many of them to limit or even stop seeing Medicare patients. They warned, however, that the bill was a short-term fix.

"It doesn’t solve the longer-term problem," said Dr. Howard R. Krauss, president of the Los Angeles County Medical Assn., who said that financial pressures were already pushing some Los Angeles doctors to limit the number of Medicare patients they treat, or to end their Medicare practice altogether. "There needs to be an overhaul of our health system nationally so that there’s adequate healthcare for everyone."

Kennedy, 76, flew directly to Washington after his daily cancer treatment and returned to Massachusetts immediately after the vote. His wife, Victoria Reggie Kennedy, wiped away tears as she watched from the Senate press gallery, where she sat with her niece Caroline Kennedy.

"I return to the Senate today to keep a promise to our senior citizens — and that’s to protect Medicare," Kennedy said later in a statement. "Win, lose or draw, I wanted to be here. I wasn’t going to take the chance that my vote could make the difference."