Senate Democrats Plan to Move Forward With Bill That Would Prevent 10.6 Percent Physician Payment Cut Despite Veto Threat

June 6, 2008 – Senate Democrats announced earlier this week that they plan to submit a bill by the end of this week that will delay a 10.6 percent cut to Medicare physicians' payments anticipated for July 1 and will have a 0.5 percent positive update through 2009. In addition, the bill will include provisions to further incentivize the Physician Quality Reporting Initiative, e-prescribing and primary care services. ASH, along with representatives from several medical societies, met with Senate Finance Committee staff to discuss the status of this bill. The Democratic staff indicated that despite a veto threat from the White House, Senate Democrats are moving forward with this legislation. In addition, staff shared that Senator Max Baucus (D-MT), chair of the Finance Committee, is committed to creating a long-term fix to the sustainable growth rate (SGR) formula.

The bill, sponsored by Senator Baucus, would cost about $18.2 billion over five years and would be funded through cuts to Medicare Advantage plans, which cost taxpayers more than traditional Medicare. Before the Memorial Day recess, Senator Baucus ended negotiations with Senate Republicans on the bill because they could not resolve differences of how to pay for the physician payment fix. The Republicans and President Bush are opposed to funding the cost of the legislation through cuts to Medicare Advantage. Consequently, the bill remains very controversial, and it is not clear if Senator Baucus can obtain Senate approval, let alone override the President’s veto.

Senate Republicans, led by Chuck Grassley (R-Iowa), released an outline on June 4, of competing legislation that would also provide a 1.1 percent increase for 18 months and that has similarities regarding e-prescribing, quality reporting and pay increases for physicians in underserved areas. The Republican bill, however, would rely on cuts to indirect medical education payments. On June 5, ASH met with Senate Finance Committee Chair Max Baucus (D-Mont) 5 to discuss his proposal and learned Senator Baucus is now also proposing an increased reimbursement of 1.1 percent.

Meanwhile, the July deadline is fast approaching and the House of Representatives has requested Senate action by the middle of this month to help ensure legislation can be enacted before the scheduled cuts are implemented on July 1.

ASH will keep members apprised of all further developments.