Health on the Hill Transcript – December 7, 2010

Mary Agnes Carey, Kaiser Health News; Jackie Judd, Kaiser Family Foundation

Lawmakers have a tentative deal to stop scheduled Medicare physician payments for one year. Meanwhile, in Texas a new study shows that the state would lose $15 billion of federal funds in one year if it left the Medicaid program.

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Jackie Judd: Good day. This is Health on the Hill. I am Jackie Judd. A deal is in the works to preserve for yet another year the current payments made to doctors who treat Medicare patients. We discuss that and other issues with Mary Agnes Carey, senior correspondent for Kaiser Health News. Welcome, as always.

The deal at this moment is among Senate leaders, both Democratic and Republicans, what is it?

Mary Agnes Carey: It would be to stop the scheduled cuts, which were to take place for physicians who take Medicare patients, about 23% was going to happen at the end of this month, to stop that for a year and keep them at their current payment rates.

Jackie Judd: And how do they propose paying for that? It’s about $19 billion.

Mary Agnes Carey: That’s right. In the health reform law, in 2014 individuals can receive subsidies if they qualify based on income to purchase health insurance in an exchange. Right now, if your income increased during that subsidy year there was a set amount of money you had to pay back to the government, $200 for individuals, I think about $400 for a couple.

Now what they are saying is depending on the increase of your income, if that additional subsidy that you were not entitled to can be recalled or taken back if you will, recovered by the government and used to pay for the physician payment fix.

Jackie Judd: Okay, now I presume that the Senate leaders are confident they can get it through their chamber, what does it look like in the House with liberal Democrats?

Mary Agnes Carey: Well, they no doubt will be upset about the idea that you’re taking any money out of the health reform law to fund this physician payment fix, but the counterweight as we know is there’s also a lot of pressure to not cut payments to Medicare, to physicians who take Medicare patients.

Medicare beneficiaries are concerned about this, physicians are concerned about it. There has been a lot of concern that maybe doctors would stop taking new Medicare patients, if their payments were cut that they would have problems with their current caseload in taking additional patients, so there are counter pressures all over the place on this one.

Jackie Judd: What is the timeline for this?

Mary Agnes Carey: Well, they could move as quickly as this week, possibly Wednesday as a stand alone bill in the Senate, and the House could certainly follow right after that.

Jackie Judd: Okay, let’s turn to two other items that I kind of want to wrap up. We have talked about them on the set before. One is the deficit commission that President Obama established. They couldn’t reach consensus late last week, some of their proposals had to do with Medicare and some other health spending, where do they go from here?

Mary Agnes Carey: Well, as you know they didn’t get the 14 votes they needed so that means that neither the House or the Senate need to take a vote on a package because the package had to have 14 votes before they were to vote on it, but I think that as the concerns remain on the deficit, on the debt, and as those pressures continue, lawmakers will no doubt continue to look at Medicare and look at some elements of those proposals.

For example the idea of a global budget for Medicare, the idea of asking beneficiaries to pay more, maybe changing the benefit design. As we know, from the Medicare physician payment issue, this is a politically powerful program, Medicare, and no one takes changes to Medicare lightly, but there are concerns that the fiscal pressures may continue to bring lawmakers to the program to look at possible changes.

Jackie Judd: Okay, and one other story I want to close the book on is in Texas, the governor and other Republican lawmakers were taking about the possibility of Texas pulling out of Medicaid, which is heavily funded of course by the federal government. Second thoughts?

Mary Agnes Carey: Well, there was a study done by state officials in Texas released late last week that found that Texas would lose quite a bit of money, about $15 billion in a year, if they pulled out of the Medicaid program because they would lose money for nursing home care, for uncompensated care, for mental health services.

And so Texas, which is facing budget problems like a lot of other states, has decided perhaps this idea of pulling out of Medicaid isn’t the best idea and now officials there are talking about we need to keep up pressure to change the program. They want more flexibility. They probably would prefer a block grant. I don’t think that’s in the future anytime soon, but they will continue to push for more flexibility in the program rather than leave it.

Jackie Judd: Okay, thank you so much, as always, Mary Agnes Carey, Kaiser Health News.