Medicare Pay For Doctors Serves As Pawn In Overhaul Debate

Dr. Nancy Nielsen, the immediate past president of the American Medical Association, urged lawmakers Tuesday to do away with once and for all looming cuts to Medicare's physician payments — something her organization has demanded for years.

At issue is a 12-year-old formula—passed as part of a broader bill by a GOP Congress and signed into law by President Bill Clinton—that requires Medicare to squeeze physician payments when they outpace broader economic growth, which they have since 2003.

Congress has intervened to block such cuts to doctors' pay in each of the last seven years. But, those Band-Aids, as Nielsen calls them, are temporary. New cuts always loom in the next year.

In the past, lawmakers from both parties supported blocking temporary fixes. This year, though, the measure has become tied to Democrats' broader ambitions to overhaul the health system. A proxy fight is now shaping up around physician payment: Democrats have an incentive to answer Nielsen's call and push a permanent solution through Congress, while Republicans are seeking to block their efforts.

House Democrats are expected to consider a standalone bill this week that would dispose of the formula and give doctors modest pay hikes for the next decade, at a cost of $210 billion. A similar, $247 billion, bill flopped last month in the Senate, where lawmakers viewed it as an unfunded threat to the deficit.

After the Senate bill foundered with no-votes from all 40 Republicans, a dozen Democrats and Sen. Joe Lieberman, I-Conn., Senate Minority Leader Mitch McConnell said in a written statement, "Hopefully it's a sign of things to come in the health care debate ahead."

Doctors, meanwhile, supported the Democrats' broader reform legislation, giving it critical momentum as it cleared the House earlier this month. But the doctors' lobby has been noncommittal about whether that endorsement will stand if lawmakers can't deliver on the so-called "doc fix."

On a conference call with reporters Tuesday, Nielsen asked, "can everyone believe Congress" — on the promise of expanding health care to more American as part of reform — "if they can't fulfill existing commitments?"

Republicans, meanwhile, are hoping to force Democrats to address physician payment as part of their sweeping reform legislation rather than the standalone bill. Republicans have argued that by addressing the issue separately — a strategy House leaders are also embracing — Democrats are concealing the total cost of reform.

Nielsen is casting lawmakers' choices less in terms of politics and more in terms of dreams and nightmares. Next year, physicians would face a 21.2 percent cut unless Congress acts again. Another temporary fix would only increase the depth of the following year's cut. If lawmakers don't act now to solve the problem permanently, she said, the situation "will become a fiscal nightmare going forward."

Because no one believes Congress will actual enforce such drastic cuts, Nielsen and other advocates, including some lawmakers, say those spending increases only matter on paper.

In September 2006, for instance, the Congressional Budget Office, Congress's fiscal scorekeeper, estimated that physician payment reform would cost $218 billion — more than the House version up for consideration this week — suggesting that Congress has managed to keep over $200 billion in federal spending off the books for years.

"When I was a little girl, I used to pretend I was a princess or could fly," Nielsen said of the lawmakers. "Adults don't have to do that."

Weaver is a reporter for Kaiser Health News, a nonprofit news service.



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