Medicare Showdown (New Eng Jour Med)

[pinto]

http://content.nejm.org/cgi/content/full/359/6/556?query=TOC

Medicare Showdown
John K. Iglehart

In a stunning rebuke of President George W. Bush, the House and Senate voted July 15 in a strong bipartisan fashion to override a veto he had issued only hours earlier, erasing a scheduled reduction of 10.6% in the fees that Medicare pays physicians. At the risk of alienating the nation's doctors, Bush had vetoed the measure because he strongly objected to the way in which it covered the costs of eliminating the fee reduction: by cutting payments to private Medicare Advantage plans that contract with the Centers for Medicare and Medicaid Services to provide coverage to Medicare beneficiaries. The House voted 383 to 41 and the Senate immediately followed with a 70-to-26 vote to overturn the veto and block the physician-fee cut that would have taken effect immediately. A total of 153 House Republicans and 21 GOP senators joined all voting Democrats to overturn the veto, which required a two-thirds majority in both chambers. By Congress's action, the bill became law without Bush's signature.

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Bush's veto represented yet another move in an ongoing ideological struggle over the design of Medicare that has pitted the administration against Democrats since 2001. This philosophical conflict resurfaced because Democrats pressed their case that Medicare should reduce its payments to Medicare Advantage plans, which cost the program considerably more every year than it would spend for a similar group of patients to be treated under the traditional model, according to separate analyses by the Congressional Budget Office (CBO),2 the Government Accountability Office,3 and the Medicare Payment Advisory Commission (MedPAC).4

In 2006, Medicare paid $59 billion to these plans — an estimated $7.1 billion more than it would have paid if the care had been delivered under fee for service.3 Unless Medicare policy is changed in some fashion, the CBO estimates that the program's expenditures will be $54 billion higher during the period from 2009 through 2012 than they would be without Medicare Advantage.2 In a recent report, MedPAC argued in favor of "financial neutrality" between payment rates for fee-for-service Medicare plans and Medicare Advantage programs — meaning "that the Medicare program should pay the same amount . . . regardless of which Medicare option a beneficiary chooses." The commission had previously shown that in 2006, per-beneficiary Medicare payments to Medicare Advantage plans amounted to 112% of per-beneficiary spending in the traditional fee-for-service program, and its 2008 analysis projected an increase to 113% (see table). This means that "the Medicare program is paying about $10 billion more for the 20% of beneficiaries enrolled in plans than if they remained in Medicare," the MedPAC report concluded.4

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Although the temporary fix for physician fees will alleviate the immediate concerns of many doctors, the remuneration problem remains unresolved for the longer term. No one is satisfied with the current formula by which Medicare calculates physician fees, but Congress has hesitated to act because of the hefty price tag that would be attached to any change deemed acceptable to both policymakers and physicians. Members of Congress have urged physician groups to develop their own proposals, but because any viable plan is certain to result in both winners and losers, organized medicine, too, has been reluctant to act. So for the time being, annual Band-Aids will continue to be the standard of care for Medicare's physician-payment woes.

Mr. Iglehart is a national correspondent for the Journal.
This article was published at www.nejm.org on July 16, 2008.

The New England Journal of Medicine is owned, published, and copyrighted © 2008 Massachusetts Medical Society. All rights reserved.

[Cleita]

1. As a Medicare recipient, I die a little each time BushCo tries to erode our

benefits. My own physician tried to get me to join one of the privatized Medicare HMOs. When I told her my alarm with these parasites, she admitted their shortcomings and that her own practice wasn't accepting them with the exception of her already established patients. They turn away new patients with the privatized HMOs, but still accept traditional Medicare for the time being. She was trying to save me some money on prescription drugs. She admitted that if Medicare is cut she will also have to turn away new patients on Medicare although I would be safe as she would keep on her own patients. I believe this is the reason she spends less and less time with me for routine physicals over the years.