Kaiser Daily Health Policy Report

March 2008, Vol 1, No 2 - Industry Trends
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Capitol Hill Watch | Senate Finance Committee Bans American Medical Association From Medicare Reform Bill Talks

The Senate Finance Committee has banned the American Medical Association (AMA) from discussions about an upcoming Medicare package that would stop a 10% cut to physician fees, according to a Democratic aide, CongressDaily reports. The cuts will go into effect on July 1 unless Congress intervenes (Johnson, CongressDaily, 2/15).

According to CongressDaily, "AMA lost the trust" of Finance Committee Chair Max Baucus (D-Mont.) "when it broke a confidentiality agreement about Medicare talks last year and informed state affiliates." In addition, an aide said the Finance Committee criticized AMA for supporting a budget provision in 2006, then complaining about it later, CongressDaily reports. The provision halted the scheduled cuts in exchange for larger cuts in later years.

AMA has been pushing the Finance Committee to delay the cuts for 18 months and increase physician payments by 1.5% to cover cost increases. House Ways and Means Health Subcommittee Chair Pete Stark (DCalif.) on Thursday said that he doubts Congress would be able to find the money for a patch and that the cut would go into effect. He also said that he doubts AMA's request for an 18-month delay would be approved. Stark said, "What we have to write is a complete new payment system. I hope we can talk about it this year and begin to think about what's needed." The committee is expected to mark up a Medicare bill in April or May to provide a temporary fix (CongressDaily, 2/15).

Medicare Legislation Outlook

Lobbyists and analysts have projected that Congress will only be able to push a slim Medicare legislative package this year "that does little more than protect doctors against payment cuts," but Baucus and Stark "weren't talking that way on Thursday," CQ HealthBeat reports. The lawmakers said that they would like to add mental health parity provisions to Medicare, expand benefits for preventive care, create programs to compare effectiveness of treatments, and increase access to the Medicare drug benefit.

Baucus said that limits on assets for the drug benefit low-income subsidy and the Medicare Savings Programs, which reduce premiums for Medicare Part B, must be increased. He said, "We must raise the asset levels allowed for all of these programs. And we must index them to keep pace with healthcare inflation," adding, "Seniors should not have to go into poverty to benefit from these Medicare programs."

Baucus also said that he would target Medicare Advantage to find funding to offset the physician payment patch. "Where justified by sound policy, we must find savings within the Medicare outpatient benefit and Medicare Advantage to offset the cost of blocking the scheduled cut in physician payments," he said. The Medicare Payment Advisory Committee has recommended reducing payments for skilled nursing and home healthcare providers. Baucus said he would be relying on MedPAC for guidance in other areas that could be cut. Baucus said, "With the help of MedPAC and other experts, we must identify areas of overspending. We must see that our Medicare dollars are being used wisely."

Baucus on Healthcare System

Baucus on Thursday also outlined 5 principles to advance healthcare reform:

  • Providing universal coverage;
  • Establishing health insurance purchasing pools to combine individuals and small businesses;
  • Researching comparative effectiveness of treatments and improving quality of care;
  • Emphasizing preventive care; and
  • Mandating "shared responsibility" by having business, individuals, government, and other "stakeholders" paying to fund the system.

He specifically said that he would introduce legislation that would "create a new entity responsible for the essential work of generating better information on the effectiveness of healthcare treatments," adding, "We will invest more money in this research" (Reichard, CQ HealthBeat, 2/14).

Reprinted with permission from the Henry J. Kaiser Family Foundation. The Foundation, based in Menlo Park, CA, is a nonprofit, private operating foundation focusing on the major healthcare issues facing the nation and is not associated with Kaiser Permanente or Kaiser Industries.

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