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Congress Wrestles With Yearly Medicare Fee Cuts

It seems just about every fall in Washington, the leaves turn, the weather cools and Congress looks for a way to avert cuts in payments to doctors in the Medicare program.

As doctors are quick to remind lawmakers, it’s not just the healers who could be hurt if the cuts take effect as scheduled Jan. 1. This year’s anticipated cut of more than 20 percent is so large that many doctors say they may have to stop seeing Medicare patients altogether.

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“Congress cannot continue to put Band-Aids on the problem, and it’s time for a permanent fix,” said Rebecca Patchin, chairman of the American Medical Association board. “We need permanent action from Congress to stabilize the security of Medicare for seniors.”

And since nothing scares politicians more than angry senior citizens, who are traditionally among the largest bloc of voters in midterm elections, the real issue facing Congress isn’t whether to stop the doctor pay cuts – which are the result of a 1997 Medicare formula gone awry – but how. More specifically, lawmakers must find a way to offset the estimated $245 billion cost over 10 years.

An Annual Debate

Democrats say they will – reluctantly – add the cost to the deficit rather than cut other spending or raise taxes. “The slate should be wiped clean,” Senate Majority Leader Harry Reid said last week. “Everyone understands we addressed these physician payment cuts every year. This is nothing different than we’ve done before.”

Despite the fact that they didn’t always offset the cost of eliminating previous scheduled cuts, Republicans nonetheless attacked the Democrats’ plans.

“It is perfectly obvious why Democrats want to resolve this issue outside the larger issue over health care,” Senate Minority Leader Mitch McConnell said Monday on the Senate floor. “They’re doing it so they can say their larger health care plan doesn’t add to the deficit. It’s a gimmick – and a transparent one at that.”

A Temporary Fix

Indeed, separating out the physician pay issue from the rest of the health overhaul bill does solve a thorny problem for lawmakers in both chambers. In the House, the 10-year cancellation of doctor payment reductions was included in the broader overhaul bill after Democratic leaders cut a deal with the fiscally conservative “Blue Dog” Democrats. The deal was that that portion of the bill wouldn’t have to be paid for as long as the House passed a separate bill to ensure that no future spending would be passed without offsetting spending cuts or increased taxes.

In the Senate, however, the Finance Committee, which oversees Medicare, included only a one-year cancellation of the payment cut, because the committee couldn’t find enough money to pay for any more.

Adding To The Deficit

“Neither side has anything to be proud of when it comes to health care,” says health care consultant Robert Laszewski. “The Republicans, for example, created the [Medicare] Part D drug program and added the whole thing to the deficit. But this was the year we were finally supposed to face up to our problems. Are we going to deal with America’s health care costs or are we just going to keep playing the games we’ve played over the years?”

Meanwhile, not all lawmakers are going along with the idea of just adding another quarter of a trillion dollars to the burgeoning national debt, including, most notably, Senate Budget Committee Chairman Kent Conrad of North Dakota, a Democrat.

But Democrats badly want the backing of the AMA for their health overhaul effort, and both Democrats and Republicans are loath to cross politically powerful seniors. The bill up this week pits those interests against those of deficit control.

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