Senate Dems face obstacles in upping Medicare payments

The Senate Democratic leadership faces significant obstacles in passing a $240 billion bill next week that would increase Medicare payments to physicians.

Senate Majority Leader Harry Reid (D-Nev.) and Sen. Debbie Stabenow (D-Mich.) set the ball in motion earlier this week, but the more senators learn about their plan to move a standalone bill that is not paid for, and on the eve of the healthcare reform bill, the more doubt has been cast on its prospects.

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Despite its cost, Reid characterized the bill as mere housekeeping to prevent a cut in physicians’ payment rates.

“We address these physician payment cuts every year,” Reid said. “All we’re doing is wiping the slate clean by adjusting the baseline for what is current policy. It’s not new policy.”

Fixing the physician payments could boost Democrats’ health reform efforts by providing physicians with a win on their foremost priority. The American Medical Association launched a national television advertising campaign Thursday supporting the Medicare bill, and lobbyists representing doctors will be out in full force next week.

Republicans countered that the Democrats’ plan to use deficit spending to pass the physician payments bill underscored the GOP’s contention that the majority party does not intend to fully pay for its healthcare legislation this year. The Congressional Budget Office estimated the bill costs $246.9 billion over 10 years.

Moreover, Senate Budget Committee Chairman Kent Conrad (D-N.D.) offered a full-throated objection to the bill increasing the deficit.

The bill is likely to be subject to three separate votes requiring 60 senators to support it before the Senate can consider final passage. Winning over centrists will be crucial, since Republicans are likely to line up against it.

The first vote, which will be a cloture vote on the motion to proceed, is scheduled for Monday at 5:30 p.m.

One of those votes would be to override any senator’s objection to the deficit spending. Asked whether he would raise such an objection, Senate Budget Committee ranking member Judd Gregg (R-N.H.) said: “I would presume, since we’ve heard so much chest-pounding about pay-go from the other side of the aisle and how important it is for fiscal discipline, that the majority leader would raise that point.”

Centrist Democratic Sens. Ben Nelson (Neb.) and Tom Carper (Del.) each expressed misgivings about passing a permanent new Medicare payment system for physicians without finding savings elsewhere in the budget.

“It could be offset, it should be offset, absolutely,” said Nelson, who nevertheless agreed it is appropriate to handle the Medicare bill separately from the healthcare reform bill.

Congress has acted nearly every year in the 2000s to block Medicare pay cuts for doctors that are the result of a flawed formula on the books. Next year, in the absence of congressional intervention, physicians would see their pay rates slashed by 21 percent.

But paying for a long-term fix has always proven too big a burden for Congress under Republican and Democratic control, leading to a series of short-term solutions that actually made a permanent fix more expensive.

The Senate Finance Committee’s healthcare reform bill would replace the 21 percent cut for 2010 with a 0.5 percent increase. The House’s healthcare reform bill would create a new payment formula. The House does not pay for the higher physician payments, either. It has, however, passed a bill that would incorporate the new spending into the Congressional Budget Office’s baseline, an approach the Senate has rejected.

Engaging in deficit spending to address one healthcare issue does not seem to jibe with President Barack Obama’s promise that healthcare reform would not add to the budget deficit. But Democrats argued the two things should not be viewed through the same lens.

Centrist Democrats expressed skepticism, or outright opposition, to the move.

Conrad categorically rejected passing the Medicare bill without finding budgetary offsets. “I’m trying to work out something else but it’s, right now, on a course to come to the floor,” Conrad said. “I don’t agree with just adding that amount to the debt. I think it should be paid for.”

Conrad said that Reid consulted with him before deciding to move ahead. “I was asked for my recommendation and I gave the recommendation that I just said here,” Conrad said. “Obviously, that advice wasn’t followed.”

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Republican Sen. John Thune (S.D.) said the Medicare bill is a “quid pro quo” to get physicians to support healthcare reform and to disguise the full cost of healthcare legislation.

“Obviously, they’re doing it to alleviate having to deal with that issue in healthcare reform because they know it will blow a big hole in this whole idea that it’s deficit-neutral. So I think it’s a very cynical ploy,” Thune said.

Democrats argue that the assumption under current law that physician payments would get smaller every year does not reflect a reality in which Congress would never let that happen.

“What we’re trying to do is to repeal a very outdated, unfair payment process and get a new baseline. This needs to be in the baseline,” Stabenow said.

But as far as Conrad sees it, deficit spending is deficit spending. “People can say, well, it’s not because they’ve changed the baseline. That is not the way a baseline can have any credibility. You can’t just alter the baseline and say, all of a sudden, you don’t have to pay for things,” he said.

The Medicare bill will be subject to amendments on the floor. Republicans are considering offering an amendment that would pay for the measure using unspent funds from the economic stimulus bill. Carper suggested that the doctor-payment fix could extend beyond the one year in the healthcare reform bill but should be paid for.

— J. Taylor Rushing contributed to this article

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