Urban, rural House Democrats spar over Medicare reimbursement formula plan

An ugly, behind-the-scenes fight between urban and rural House Democrats has marred a deal to overhaul the reimbursement formula for Medicare.

A group of Democrats announced the Medicare reimbursement rate agreement Thursday after months of negotiations with Democrats from large cities. Lawmakers from rural areas have long believed the Medicare formula shortchanges their local doctors and hospitals in favor of urban centers.

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But even before members of the “Quality Care” Coalition of rural Democrats held a Thursday press conference to announce the deal -- which they said finally guarantees their support for any public health insurance option the House proposes -- Democrats on the urban side of the negotiating table had become furious at their counterparts for how they handled the announcement, and for what they said was an unfair and uninformed vilification of the cities they represent.

Urban lawmakers deeply involved in the talks, including Democratic Caucus Vice Chairman Xavier Becerra (D-Calif.) and Reps. Joseph Crowley (D-N.Y.) and Allyson Schwartz (D-Penn.), were scheduled to join rural lawmakers in announcing the deal. But they never did.

Members and aides cited everything from “scheduling conflicts” to “bruised egos” in explaining why the announcement was ultimately made by only rural-area Democrats.

Rural lawmakers at the press conference, led by Reps. Ron Kind (D-Wisc.), Betty McCollum (D-Minn.) and Bruce Braley (Iowa), spoke at length about creating a healthcare system that rewards quality, not quantity, of service -- a goal no one takes issue with.

But some members stepped over the line, Democrats from urban centers said, in insinuating that lawmakers who were reluctant to completely updend the reimbursement formula were intent on having Americans receive less than the best medical care available.

“It was not handled well,” one Democrat involved in the negotiations said. “Optically, it was not smart. And I’m not so sure that everyone who spoke really knew what they were talking about.”

Tempers flared further on the floor Thursday afternoon, when some urban Democrats confronted the Quality Care Coalition leaders about the press conference, leading to some testy exchanges between members.

Feelings were bruised as leaders try to rally their fractious caucus around a healthcare bill that has divided Democrats along political and regional lines. 

Democratic leaders had only just managed to cool tempers between conservative Blue Dog Democrats and the liberal members of the Progressive Caucus, who had been openly questioning each other’s motives in private Caucus meetings to discuss the form the House’s public option will take.

But the new feud is less likely to impact House Speaker Nancy Pelosi’s (D-Calif.) drive to pass a healthcare bill out of the House, as both urban and rural Democrats agreed that the deal they worked out is untouchable at this stage of the House’s healthcare debate.

The agreement will let the Institutes of Medicine (IOM) examine and possibly alter the current region-by-region Medicare payment system, which, on average, reimburses healthcare providers in large cities at higher rates than doctors and hospitals in less populous areas.

Remarks made at that press conference, however, left urban-district lawmakers believing their fellow Democrats were accusing them of embracing shoddy, inefficient patient care at the behest of their local healthcare lobbys.

“Iowa is near the top in terms of quality care and, in terms of cost, among the most efficient, yet they are near the reimbursement bottom,” Rep. David Loebsack (D-Iowa) said at Thursday’s press conference. “I made the argument consistently that if we didn’t do what we are doing today, we’d be consigning millions of Americans across this country to substandard healthcare.”

“If everyone in America received the healthcare that’s provided by the communities that you see represented here, Americans would live longer and they would get sick less often,” added Rep. Earl Blumenauer (D-Ore.).

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“Does that mean that anyone who’s not part of the Quality Care Coalition isn’t for quality care?” fumed one Democrat, livid that fellow lawmakers would not just ignore the higher costs of providing medical care in cities, but use it as a weapon with which to bash urban hospitals.

Some “Quality Care” members told The Hill that their urban counterparts were invited to the press conference, but felt compelled not to attend after being unable to dictate the speaking roles.

And some members believed that once urban Democrats began to realize that they were “simply out-negotiated,” they let their tempers get the best of them.

The agreement, which House leaders have vowed will be inserted into whatever healthcare bill the House votes on, directs the IOM to examine and implement, through the Secretary of Health, a new reimbursement schedule. That new formula will not be alterable by Congress.

Members of the Quality Care Coalition clearly believe the new formula will cut reimbursement rates in many large cities.

But Becerra and Crowley stressed that nothing will be pre-determined, and that the IOM must take into account all of the factors that right now lead to cities receiving higher average reimbursement rates for Medicare services.

An IOM report determining that the current formula is imbalanced is very much an “if,” Becerra said.