PATIENT CHOICE? On Wednesday, the Senate passed the Medicare Improvements for Patients and Providers Act with a vote of 69-to-30. The bill freezes doctors' Medicare payments at their current rate, forestalling the planned 10.6% cut to participating physicians.

The bill also guarantees a 1.1% rate increase in 2009 and reduces the payments that Medicare makes to insurance companies providing Medicare Advantage benefits. Sen. Edward Kennedy (D—Mass.) left his brain cancer treatments to cast his cloture vote, ending the Republican filibuster and passing the bill. The House passed an identical bill June 24 with a vote of 355-to-59, so it now goes to President Bush who has said he'll veto it.

Physician Medicare Payments Linked to Economy, New Bill Merely Temporary Fix

In 1997 Congress established a formula that couples the reimbursements paid to doctors treating Medicare patients to the economy. This means...

• when the economy is great, doctors' payments stay steady or go up;
• when the economy is not so great, doctors' payments go down, even though their costs don't; and
• this calibration of the amount paid to doctors happens every year, but Congress keeps voting to put if off.

This year the expected cut is 10.6%, which the Senate's H.R. 6331 bill forestalls.

Some of the problems with this approach include the following:

• The formula doesn't take into account how doctors perform.
• Doctors who keep costs low and patients healthy as well as those who provide lousy care and prescribe unnecessary tests get the same annual change in payment.

• Doctors claim that if the reduction is implemented, they will have to step out of the Medicare system, or they won't be able to afford being doctors.
• This will seriously reduce the pool of doctors available to treat people whose only medical insurance is Medicare.

Doctors want their payments to increase along with other increases in costs of medical care—the Congressional Budget Office predicts this would cause an increase in costs of $65 billion in the next five years.

Physician Medicare Payments to Come from Insurance Provider Cuts

Congress had to make up the difference to pay physicians. They are taking it from the amount of money paid to insurance companies who provide Medical Advantage plans. Medical Advantage Plans have 9 million subscribers.

In a Medical Advantage Plan, Medicare pays the insurance company a set amount for each person in the plan—whether or not that person uses medical services. And it costs more—up to 17% more for each beneficiary than traditional Medicare.

If Medicare reduces this amount, then the insurance companies will...

• cut benefits
• increase premiums
• both

Critics of Medical Advantage Plans claim they...

• are "creeping privatization" of a government program
• undermine Medicare's universality
• provide coverage for only the healthy and wealthy

Copyright © 2009 Informify

Question for Readers:

Do you want President Bush to veto this Medicare bill?