House Votes To Cut Medicare Payments To Insurers Instead Of Doctors

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Main Category: Medicare / Medicaid / SCHIP
Also Included In: Health Insurance / Medical Insurance;  Seniors / Aging
Article Date: 25 Jun 2008 - 3:00 PDT

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US House representatives set aside party politics on Tuesday and voted by a large majority to postpone the 1st July planned cut in payments to doctors who treat patients under the federal Medicare program and to pay for it by shaving billions off reimbursements to private insurers that contract with Medicare to provide healthcare for the elderly and disabled.

The House voted 355 to 59 to pass the Democrat-backed legislation, more than the two thirds majority needed to override a threateded presidential veto. In a surprising move, the bill was supported by a majority of 129 Republicans.

President George W Bush had threatened to veto the bill because it includes reductions in payments to Medicare Advantage, the program that allows older citizens to get their healthcare insurance from private insurers who are then reimbursed under Medicare.

The White House is pushing for health reforms where more support is given to individuals and families to choose their own private insurance and get tax relief instead of increasing coverage from state and federal programs.

The legislation passed in the House, if approved by the Senate, stops the planned 10.6 per cent cut in Medicare payments to doctors and hospitals for 18 months. The cuts come into force on 1st July.

There appears to be some disagreement about the extent of the reductions in payments to insurers that would result from this bill. Some say it will shave 14 billion dollars off their Medicare reimbursements over five years, while a House Republican group says it is more like 47.5 billion over 11 years.

Democrats say that if the cuts were to go ahead, more doctors will stop treating Medicare patients. House representative John D. Dingell (Democrat, Michigan), is chairman of the House Energy and Commerce Committee that helped to draft the bill. According to the Washington Post, Dingell told the press that:

"If we fail to enact this legislation, physicians will face a 10 percent pay cut that jeopardizes access to care for seniors and the disabled."

Statements from the White House said that reducing payments to the insurers covered by this bill will mean fewer services and benefits, which particularly hurts elderly patients in rural areas.

But the Democrats said that private insurers already get too much money. They want to reduce payments to insurers like UnitedHealth Group Inc, WellPoint Inc, and others that provide benefits under Medicare Advantage. According to a congressional advisory commission, on average the insurers get 13 per cent more than it costs Medicare to provide the services itself.

According to Bloomberg News, Representative Frank Pallone (Democrat, New Jersey), said in the House that:

"This is a reasonable compromise that both Democrats and Republicans should support."

"With less than a week to go before the impending physician cuts go into effect, it is time to put politics aside," he urged.

However, the battle is not over because it now shifts to the Senate where similar legislation is yet to be debated, and according to media speculation, may be more closely fought. But passing this bill in the House now means the Senate gets to negotiate the added part about reduced payments to private insurers.

Harry M Reid (Democrat, Nevada), the Senate Majority Leader told the press he will be bringing the House version of the bill to a vote this week, reported the Washington Post.

Sources: Washington Post, Bloomberg.

Written by: Catharine Paddock, PhD
Copyright: Medical News Today
Not to be reproduced without permission of Medical News Today