Doctor payments may open Medicare to changes

The Bush administration’s top Medicare official hinted yesterday that he might be willing to cooperate with Congress on legislation amending the program this year.

The new willingness to revisit the Medicare issue comes amid long-standing concerns that such a bill would attract a plethora of proposals that could undermine the rollout of the new prescription-drug benefit.

Mark McClellan, administrator of the Centers for Medicare and Medicaid Services (CMS), told reporters yesterday that he has been working with members of Congress and physician organizations on proposals to prevent a looming reduction in Medicare’s payment rates for doctors and to repeal the formula that sets rates by linking higher payments to better-quality healthcare.

Changes to the Medicare payment system that include “pay for performance” incentives can be made in time to prevent next year’s cut, McClellan said.

“There’s going to be a lot more work done on this over the next month,” McClellan said. He also distributed a “quality-improvement roadmap,” which outlines physician-payment principles that resemble those espoused by congressional supporters of pay-for-performance mechanisms.

Rep. Nancy Johnson (R-Conn.), chairwoman of the House Ways and Means Committee’s Health Subcommittee, and Senate Finance Committee Chairman Chuck Grassley (R-Iowa) are working on separate tracks to draft legislation.

McClellan also predicted that Congress would not simply authorize more money for doctors on a temporary basis, a change from the approach it has taken in years past. “What I don’t think is going to happen this year is just adding the money in. I think there’s true, strong interest in both parties in finding better ways to pay” doctors, McClellan said.

Since Congress passed the Medicare drug benefit in 2003, critics in both parties have sought opportunities to alter it or to make wholesale changes to Medicare at large.

So far, opposition from the White House — carried through by the GOP leadership in Congress — has been an obstacle to those wanting to alter Medicare.

But the end of a temporary adjustment in doctor payments next year may be changing the political landscape. Congress and the administration are being lobbied by the American Medical Association and other doctors groups for relief from next year’s scheduled cut, which would reduce their payments by about 5 percent.

The administration would rather avoid a messy legislative battle this year, however. McClellan said that CMS can act on its own to lessen the impact of the physician-payment cut and to promote higher quality healthcare.

“There’s plenty we could do without legislation,” he said. The agency is conducting several demonstration projects with those aims, he noted.

With or without legislation, McClellan said, “There’s going to be more money going into care that is high-quality.”

If pay-for-performance legislation advances, considerable challenges confront members who would want to use it as a vehicle to enhance the drug benefit or to rein in the costs of the program. One House Democratic aide said that the GOP leadership would be able to block practically any measures that would expand the scope of a doctor-payments bill.

Nonetheless, some members would still try to expand the bill, even if doing so would draw attention to the lingering dissatisfaction with the Medicare law just as the administration is working to persuade Medicare beneficiaries to sign up for drug coverage.

Rep. Jeff Flake (R-Ariz.), who fought against the 2003 bill and has sponsored several Medicare bills this year, is planning to use “any opportunity” to address the concerns that he and other conservatives have with the cost of the prescription-drug benefit, according to his spokesman, Matthew Specht.