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Senate Democrats Will Move Their Own Medicare Payment Bill in June

By Drew Armstrong, CQ Staff

May 21, 2008 -- Senate Finance Chairman Max Baucus, unable to nail down a bipartisan bill to block a scheduled reduction in Medicare payments to physicians, has decided to proceed without GOP support.

Baucus, D-Mont., said Wednesday that he will move forward after the Memorial Day recess with a Democrat-supported Medicare bill that Republicans almost certainly will block, forcing an eventual compromise ahead of the June 30 deadline.

"It seems clear to me that we're not going to get an agreement in time to meet the deadlines, so I'm going to move forward with a bill that I think has the right policies and priorities for the Medicare program, to include the doctor fix for 18 months," Baucus said Wednesday, following a meeting with committee members from both sides.

Members of both parties want to halt a 10.6 percent cut in Medicare payment rates for doctors that is scheduled to take effect July 1. But they have been at loggerheads over how to offset the cost of an 18-month fix, which is estimated at $14 billion to $18 billion.

Some Democrats are not optimistic about the chances for getting their bill enacted by the deadline, but see a chance to take a philosophical stand, at least.

"It's going to get vetoed anyways. But we still need to say what we stand for," Sen. John D. Rockefeller IV, D-W.Va., said on Tuesday, following a meeting with committee Democrats. "Our guy's going to be president, so we'll be able to do more next year," Rockefeller predicted.

Republicans insist a bill can be cleared this year.

"Before this process is over, I'm confident that we're going to have a bipartisan package that passes the Senate," said ranking Finance Republican Charles E. Grassley of Iowa. "There are differences, but there aren't big differences," he said.

The largest disagreement has been over how to pay for the package. According to Sen. Kent Conrad, D-N.D., the Democrats' plan would cost $18.2 billion over five years, while the GOP counter-offer would cost $14.9 billion.

Baucus is hoping to add some extras to the package, such as a small increase to physician payment rates, electronic prescribing incentives for doctors, and funding for preventive care programs.

The bulk of either plan is likely to be paid for with cuts to Medicare Advantage, a private-sector version of Medicare subsidized by the government. There is general agreement to cut "Indirect Medical Education" payments to hospitals funneled through Medicare Advantage plans.

But that is where the consensus ends. Baucus and other Democrats want to put a cap on the subsidy that some of the private plans receive, noting that they cost taxpayers more than the traditional Medicare program. "We simply, as a country, cannot afford to continue. There has to be some reasonable limitation" on the amount paid to the private plans, Conrad said.

Republicans and the White House do not want to alter the subsidies for the private insurance plans.

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