Clash on Preventing Cut to Doctor Payments
Centers on How to Pay for Medicare Bill

July 7, 2008

Before Congress took the July 4th week off, a partisan standoff in the Senate blocked a bill that would prevent a cut in doctors’ Medicare fees. When members return to Capitol Hill this week, the question for Democrats and Republicans will be: Who will blink to get it done?

Both parties want to avoid the 11% drop-off in physician payments. Already, lawmakers have missed the July 1 deadline for the automatic cut to go into effect, but the Bush administration said it won’t process claims at the new, lower rate for the first 10 business days of July.

The clash — and the holdup — center mostly on how to pay for the bill. Its cost, about $20 billion over five years, reflects a package of other tweaks in addition to the doctors’ money. To fund them, the bill relies largely on trimming outlays for the private insurers’ version of Medicare, known as Medicare Advantage plans.

The White House has threatened to veto the bill, largely over new limits it would impose on one particular type of Medicare Advantage plan known as private fee-for-service. Such plans are offered by companies including Humana Inc., WellPoint Inc. and UnitedHealth Group Inc.

Despite the veto threat, the House passed the bill last month, 355-59. But in the week before Congress’s holiday recess, it fell one vote short of the 60 needed to move forward in the Senate.

Senate Democrats have vowed to bring the bill up again this week. So the spotlight will be on a handful of Republican senators who could potentially switch votes. The American Medical Association, which backs the bill and says many of its members would be reluctant to see new Medicare patients if the cut remains in effect, ran ads last week targeting 10 Republican senators in their home states.

They include Pennsylvania Sen. Arlen Specter, New Hampshire Sen. John Sununu and Mississippi Sen. Roger Wicker. Texas Sen. John Cornyn, who, like Sens. Sununu and Wicker, is up for reelection this fall, saw the political arm of the Texas Medical Association withdraw its endorsement of him. "I think they don’t understand the fury out there," said AMA President Nancy Nielsen. "It’s galvanized doctors."

On the other side, America’s Health Insurance Plans, the main lobbying group for the industry, ran its own ads, defending the Medicare Advantage plans. "What we’d like to see is the physician-fee issue addressed without the significant reliance all the bills propose placing on Medicare Advantage beneficiaries," said Karen Ignagni, chief executive of the group.

Even if the bill wins 60 votes in the Senate this week, it would not be enough to overcome a veto if the White House refuses to back down. That would throw the issue back to Congress with even less time left on the clock before the cuts take full effect. Democrats would then face more pressure to accept a compromise measure, likely more narrowly crafted, that does not go after the private fee-for-service plans.

Write to Anna Wilde Mathews at