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Next Week or Bust for Physician Payment Fix?

By Mary Agnes Carey, CQ HealthBeat Associate Editor

The week of Sept. 18 may be make-or-break time for physicians seeking to get Medicare payment legislation through Congress before the midterm elections. Without action, Medicare payment cuts of 5.1 percent are scheduled for Jan. 1.

"I think it has to take shape by Tuesday or Wednesday or it moves to the lame duck" session, said one source close to the negotiations. "It's got to be moving by midweek," said another.

Lawmakers have urged their leaders to move quickly on passing legislation that would increase Medicare physician payments for 2007. In the House, a bipartisan group of more than 260 members sent a letter Sept. 11 asking Speaker J. Dennis Hastert, R-Ill., and Minority Leader Nancy Pelosi, D-Calif., to take action this month to avert the impending cut.

"At a minimum, we must provide a modest increase for physicians as they received a zero increase this year and are being encouraged to adopt health information technology," the House members wrote. In July, 80 senators sent a letter to Republican and Democratic leaders in that chamber, urging them to take action to stop the scheduled reductions.

House and Senate committees with jurisdiction over Medicare are drafting measures that are likely to link any physician payment increases to reporting requirements. Industry and Capitol Hill sources say the situation is highly fluid and subject to change. "I think the general attitude right now is people are trying to keep their powder dry and see how it plays out today and throughout the weekend," a physician source said Friday.

Physicians did not favorably receive a package from House Ways and Means Committee Chairman Bill Thomas that would freeze Medicare physician payments for 2007 at 2006 rates, but would increase payments by 2.8 percent in mid-2007 for doctors participating in a Centers for Medicare and Medicaid Services program to report quality data. Thomas' proposal would cut payments to doctors not participating in the program by at least 5 percent in 2008.

The American Medical Association and other physicians' groups prefer a 2.0 percent update for all physicians, with additional payment increase of 0.8 percent for reporting quality data, the physician sources said.

Some physicians say doctors in small practices may not have the computer systems in place to report quality data and should not be penalized. "Not everyone can report quality data and they shouldn't have to take a freeze," said Larry Fields, president of the American Academy of Family Physicians.

A House Ways and Means Committee spokesman declined to comment Friday on the negotiations.

House Energy and Commerce Chairman Joe L. Barton, R-Texas, is also drafting a package that sources said calls for a three-year freeze in payment cuts, with a pilot quality reporting program in 2007. In 2008–09, physicians could receive payment updates of 2.5 percent each year for quality reporting.

The measure is also likely to have a "balanced billing" provision that would allow physicians to charge higher-income patients (individuals with incomes of $80,000 or more and couples with incomes of $160,000 or more) more for their care. The provision is similar to one contained in physician payment legislation (HR 5866) sponsored by Rep. Michael C. Burgess R-Texas. The Barton bill's pricetag, sources said, could be as high as $30 billion over five years.

Energy and Commerce Committee spokesman Kevin Schweers said Medicare physician payment legislation "remains a priority" and that staff is working on the issue.

In the Senate, Finance committee aides are working on physician payment legislation but no details were available Friday, said spokeswoman Jill Kozeny.

If the payment issue does slip until November, physicians' chances to get the deal they prefer—an increase in payments for all physicians who participate in Medicare with extra financial incentives if they participate in a quality reporting program—will greatly diminish.
"In November, you never know the attitude or general approach of the members when they come back," said one physician source.

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