CQ TODAY – HEALTH
June 12, 2008 – 4:11 p.m.
Republicans Block Senate Debate on Medicare Physician Payment Bill

After Senate Republicans defeated Democrats’ effort to bring up a Medicare bill for debate Thursday, Democratic leaders conceded that they will have to negotiate with the GOP on a compromise.

The bill (S 3101), by Senate Finance Chairman Max Baucus, D-Mont., is aimed at reversing a 10.6 percent cut in physician payments under Medicare that is scheduled to take effect July 1. Doctors say the cut is unaffordable, and they might refuse new Medicare patients if it takes effect, making the issue of high importance to Congress.

But Democrats and Republicans have been unable to agree on how to pay for averting the cut, the main issue behind Thursday’s vote. The tally was 54-39, shy of the 60 votes needed to invoke cloture — or end filibusters — on a motion to begin debate on the bill.

Republicans have offered their own legislation (S 3118), which also would avert the physicians’ pay cut. But it also seeks to prevent changes that Baucus’ bill would make to the Medicare Advantage program, under which insurers provide seniors their health benefits in place of the government.

Now, with time running short, Democrats’ only realistic option is to negotiate with Republicans.

“We have to come to some fiscally responsible agreement on how to improve Medicare for low-income and rural beneficiaries, how to keep pharmacies up and running under the drug benefit and how to keep doctors decently paid for seniors’ care,” Baucus said in a statement.

The cloture motion failed despite the support of nine Republicans. Had five absent Democrats attended the vote, the cloture motion likely would have succeeded.

Before the vote, Majority Leader Harry Reid, D-Nev., refused a request from Republicans that he allow a cloture vote on the alternative bill by the ranking Republican on the Finance Committee, Charles E. Grassley of Iowa.

“We want to legislate on this important piece of legislation,” Reid said of Baucus’ bill. “It’s not only a doctors’ fix, it’s a fix to our health care system.”

Reid changed his vote from “yes” to “no” before the vote ended so he would have the ability to call the Baucus bill up again under parliamentary rules. But Reid would need to either get more Republican votes or ensure that his entire caucus can be present for the vote to succeed.

A compromise likely would not make substantial changes to Medicare Advantage and would probably be more limited in scope than Baucus’ bill, which also includes some expansions of Medicare benefits.

Paying for the Bill

The Baucus bill would reverse the cut and provide doctors with a 1.1 percent pay increase in 2009, which would cost $9.9 billion through 2010, according to the Congressional Budget Office. Altogether, the bill would cost $19.8 billion over five years and would cover those costs primarily by cutting costs from Medicare Advantage.

That program was created in the Republican Medicare overhaul of 2003 (PL 108-173) and has strong support from many Republicans — including President Bush, who threatened on Thursday to veto the bill. But the Government Accountability Office, Congressional Budget Office and Medicare Payment Advisory Commission have all said that Medicare Advantage plans are overpaid compared with traditional Medicare, making the plans a target for Democrats.

Baucus said his bill would not have a great effect on most Medicare Advantage plans. It would gradually eliminate bonus payments some plans receive for being located in areas with teaching hospitals. It would also limit the growth of one type of Medicare Advantage plan, called “private fee-for-service.” Such plans are the most overpaid, according to the congressional advisory agencies.

The GOP Alternative

Grassley’s bill would provide doctors a 0.5 percent increase in the last six months of 2008 and an additional 1.1 percent increase in 2009, but without changes to the Medicare Advantage private fee-for-service plans.

To pay for his bill, Grassley would eliminate the same bonus payments related to teaching hospitals that Baucus cut, and would make two small changes in Medicaid, the health entitlement for the poor, that together yield about $2.8 billion in savings, according to the CBO.

Baucus and Grassley now are expected to restart stalled negotiations.

“They will do what they should have done in the first place, which is to continue negotiations and bring a bipartisan bill to the floor,” said Don Stewart, a spokesman for Minority Leader Mitch McConnell, R-Ky.

But Thursday evening, nerves seemed raw; Baucus issued a statement accusing Bush of protecting insurers, and Grassley issued a statement accusing Democrats of wasting time and taxpayer money voting on the Baucus bill. No new talks were reported.

Kathleen Hunter contributed to this story.

Source: CQ Today
Round-the-clock coverage of news from Capitol Hill.
© 2008 Congressional Quarterly Inc. All Rights Reserved.