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Mum's the Word as Finance Spins Wheels on Medicare

By John Reichard, CQ HealthBeat Editor

November 7, 2007 -- If laying out options and vigorous discussion are the marks of progress, then Senate Finance Committee members made strides at a meeting Wednesday toward assembling a package of Medicare revisions to block a scheduled 10.1 percent cut in payments to physicians Jan. 1. But if the benchmark is the number of decisions on cuts elsewhere in Medicare to pay for the "doctor fix," then the panel has a long way to go.

With the end-of-the-year work piling up for his committee on tax, Medicare, and other issues, Chairman Max Baucus, D-Mont., doesn't want the distraction of dealing with press reports and resulting pressure from lobbyists about the details of possible payment cuts. The panel's top Republican, Sen. Charles E. Grassley of Iowa, announced to reporters after the meeting that he intends to play ball with Baucus. "In these rump sessions, he's asking us not to tell what goes on in there," Grassley said. "Those are the rules of the game and I'm going to play by the rules."

But other Republicans expressed frustration with the process while offering few, if any, details of the type and size of cuts under discussion. Utah Republican Sen. Orrin G. Hatch voiced worry that, with few decisions made so far, cuts would be determined at the last minute with little public scrutiny. "I think they're a long way from consensus on a lot of things," Hatch said after leaving the meeting. "There's a worry that they might just put together a package without really considering it in public, and I think we need to do that, this is an important bill," he said. "A lot of people could be very disastrously affected if it's not done right. We ought to have a markup and we ought to battle these things out in public."

Baucus has been pushing for a two-year fix that, according to earlier estimates, would help drive up the cost of the total package to as much as $30 billion over five years. In addition to blocking payment cuts to doctors, the package among other provisions is also expected to boost rural provider payments and block cuts in rehab therapy. Meanwhile, Republicans led by Grassley have called for a one-year fix to ease pressure for a large package of cuts including those in payments to private health plans in the Medicare Advantage program.

"I really have questions about why they are so fixated on the so-called doctor's fix," said Mississippi Republican Trent Lott, apparently referring to pressure for a two-year fix. "I'm very much concerned about offsets that would impact Medicare Advantage, which would impact rural states." Lott also expressed frustration with making cuts in a large number of areas. With a one-year fix, "you don't have to deal with as many ... we're talking about oxygen for old people, for heaven's sake, which is a concern."

Lott said "they had a list of 10 or 12 areas that could be impacted" by payment cuts used as offsets. "This list of other offsets quite often are going to wind up costing more than they're worth, whether it's imaging ...." Lott said, but did not finish the thought. Asked whether home health cuts were on the list, he said "I think they finally decided that they're going to be pretty limited in what they do in that area."

While committee members said little publicly about Medicare Advantage cuts after the meeting, a significant amount of discussion behind closed doors centered on payments to private fee-for-service plans, sources said. A number of analysts have questioned the value those plans deliver to Medicare because they receive large payments and do little to manage care, but private fee-for-service plans are growing rapidly in rural areas, which typically have strong influence over legislation produced by the Finance Committee.

The committee's timetable on the Medicare package is unclear. "We just had a good discussion," said Arkansas Democrat Blanche Lincoln. "I think we're just going to continue to visit and talk and get a better understanding of what's in the details," she said. Asked whether the committee will mark up legislation, Lincoln said "I think we'll come up with a product." Pressed on a possible markup, she said "I don't think we've gotten to that point yet."

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