Staffers tweak Medicare bill; measure’s fate still uncertain

Congress is approaching zero hour in its mission to cobble together a Medicare package this year, and its contents are as fluid as they have been all year.

Staffers representing the House Energy and Commerce, House Ways and Means and Senate Finance committees worked through the weekend on a new draft of the legislation, the cornerstone of which would prevent a scheduled 10 percent cut in Medicare payments to doctors.

{mosads}But despite the inability over several months of Finance Committee Democrats and Republicans to come to terms on a package substantially smaller than favored by the House, Democratic staff emerged from the talks with a larger proposal than already rejected by Republicans, according to a discussion draft completed in the wee hours of Saturday morning that began circulating widely Monday.

Lobbyists believe that House Democrats led the charge to fatten the bill — especially the provisions affecting health insurance companies — after the Finance Committee dominated the proceedings since August.

Senate Finance Committee Chairman Max Baucus (D-Mont.) has sought to win over ranking member Chuck Grassley (R-Iowa) and enough panel Republicans to ensure the Medicare bill could receive the 60 votes all but certain to be needed to move it through the Senate.

The House Democratic leadership largely acceded to this strategy but lobbyists say that powerful House Democratic players such as Energy and Commerce Committee Chairman John Dingell (Mich.), Ways and Means Committee Chairman Charles Rangel (N.Y.) and Ways and Means Health Subcommittee Chairman Pete Stark (Calif.) agitated for more influence.

Meetings continued through the weekend and into Monday morning, with lawmakers expected to weigh in as the day went on. The Medicare legislation, and the likelihood that it would see the light of day before the House departs for the year at the end of this week, is a moving target that is likely to evolve all week, much to the consternation of the healthcare sectors that would be affected by the measure.

The lack of clarity on the bill, along with the uncertainty about the prospects of the proposed vehicles for the Medicare bill — such as the omnibus appropriations measure or the Alternative Minimum Tax bill — is leading many healthcare lobbyists to tell their clients that a very real possibility exists that there will be no Medicare bill passed this year.

Under the proposal, the doctors would get a one-year, 0.5 percent pay hike instead of a 10 percent cut. Physicians, however, would have to tolerate other provisions they oppose, such as a requirement that they use electronic prescriptions.

The draft also would extend the State Children’s Health Insurance Program (SCHIP) through September 2008, which would allow the Democratic leadership to dispatch another languishing priority.

The Democratic proposal features numerous Medicare proposals that are opposed by Republicans, including several that the Bush administration already has indicated would prompt a veto.

The provisions in the Democratic Medicare draft most likely to raise the hackles of key Finance Committee Republicans — and the White House — are those that would reduced federal spending on private health insurance plans under Medicare Advantage. Health and Human Services Secretary Mike Leavitt made clear in a letter to Congress last week that Medicare Advantage cuts would be veto bait.

The Democratic proposal calls for $14.8 billion to be carved out of the program. Included in that total is a $5 billion cut in payments to private fee-for-service plans, the most expensive and fastest-growing type of Medicare Advantage plan but one with support from many rural lawmakers and the Bush administration.

In August, the House passed a sweeping bill to reauthorize SCHIP, fix Medicare’s doctor payments, cut Medicare Advantage spending and make a plethora of changes to other Medicare policies.

The House-passed measure would have cut $50 billion from Medicare Advantage over five years, reflecting House Democrats’ distaste for a program they believe the administration nurtured as part of an effort to privatize Medicare. The Senate has not voted on any Medicare legislation this year and passed a stand-alone SCHIP bill.

The Democrats justified their cuts based on findings that Medicare spends, on average, 12 percent more to cover a beneficiary in Medicare Advantage than through government-run Medicare. Although the discussion draft from this past weekend doesn’t go nearly as far, the $14.8 billion is substantial and much more than the White House could support.