U.S. Senate Begins Negotiations on Medicare Payment Cuts
[Posted 06/09/08]

Last week, Senate Finance Committee Chairman Max Baucus (D-MT), released a summary of his draft Medicare legislation, which will be the starting point for more formal negotiations Medicare physician payments. CMA is working vigilantly with our Senators and key House members to get the cuts stopped before the 10 percent cut takes effect July 1. Senate leaders in both parties have reiterated their commitment to stopping the payment cuts.

Specifically, Chairman Baucus is proposing an 18 month bill that will stop the 10 percent sustainable growth rate cut on July 1 and the 5 percent cut on January 1, 2009. It would continue the current 0.5 percent physician payment update through the rest of 2008, with an additional 0.5 percent update for 2009.

Baucus’s proposal would extend the Physicians Quality Reporting Initiative (PQRI) through 2010 with a 2 percent bonus. The proposal also contains a phased incentive for physicians to adopt electronic prescribing, with bonuses being implemented before penalties are applied. The bonuses are cumulative, so that a physician who uses electronic prescribing and participates in PQRI in 2009 could qualify for a 4 percent total bonus.

Many provisions that CMA has opposed are not in the bill, including public disclosure of physician claims data in quality reporting initiatives, mandated use of electronic medical records, or prohibition of physician hospital ownership.

The proposed legislation would be financed primarily by cuts in Medicare Advantage payments which the Administration strongly opposes. Senator Baucus expects to introduce the bill this week. Senate Republicans indicate that they plan to introduce a counter proposal after the Baucus bill is introduced.

The current legislative activity related to Medicare physician payments is focused in the Senate. As you may remember, the House passed the CHAMP Act last July, which would similarly stop the cuts in 2008 and 2009, replacing them instead with 0.5 percent increases in each of those years. It would also update California’s geographic payment localities and prevent any geographic payment reductions for three years.

If the Senate passes its own Medicare legislation, the bills would go to conference committee where House and Senate leaders would resolve any differences between the two pieces of legislation.

Contact: Elizabeth McNeil, 415/882-3376 or emcneil@cmanet.org.