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July 2008

House overrides veto

By Larry Lipman | Tuesday, July 15, 2008, 04:55 PM

The House of Representatives just voted 383-41 to override President Bush’s veto of the Medicare bill averting a 10.6 percent pay cut for doctors.

Senate action is expected at 6 p.m.

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Bush vetoes Medicare fix

By Larry Lipman | Tuesday, July 15, 2008, 02:21 PM

President Bush has vetoed the Medicare bill that would avert a 10.6 percent pay cut for doctors.

Here is the text of Bush’s message to Congress:

I am returning herewith without my approval H.R. 6331, the “Medicare Improvements for Patients and Providers Act of 2008.” I support the primary objective of this legislation, to forestall reductions in physician payments. Yet taking choices away from seniors to pay physicians is wrong. This bill is objectionable, and I am vetoing it because:

  • It would harm beneficiaries by taking private health plan options away from them; already more than 9.6 million beneficiaries, many of whom are considered lower-income, have chosen to join a Medicare Advantage (MA) plan, and it is estimated that this bill would decrease MA enrollment by about 2.3 million individuals in 2013 relative to the program’s current baseline;

  • It would undermine the Medicare prescription drug program, which today is effectively providing coverage to 32 million beneficiaries directly through competitive private plans or through Medicare-subsidized retirement plans; and

  • It is fiscally irresponsible, and it would imperil the long-term fiscal soundness of Medicare by using short-term budget gimmicks that do not solve the problem; the result would be a steep and unrealistic payment cut for physicians — roughly 20 percent in 2010 — likely leading to yet another expensive temporary fix; and the bill would also perpetuate wasteful overpayments to medical equipment suppliers.
In December 2003, when I signed the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) into law, I said that “when seniors have the ability to make choices, health care plans within Medicare will have to compete for their business by offering higher quality service. For the seniors of America, more choices and more control will mean better health care.”

This is exactly what has happened — with drug coverage and with Medicare Advantage.

Today, as a result of the changes in the MMA, 32 million seniors and Americans with disabilities have drug coverage through Medicare prescription drug plans or a Medicare-subsidized retirement plan, while some 9.6 million Medicare beneficiaries —more than 20 percent of all beneficiaries — have chosen to join a private MA plan. To protect the interests of these beneficiaries, I cannot accept the provisions of this legislation that would undermine Medicare Part D, reduce payments for MA plans, and restructure the MA program in a way that would lead to limited beneficiary access, benefits, and choices and lower-than-expected enrollment in Medicare Advantage.

Medicare beneficiaries need and benefit from having more options than just the one-size-fits-all approach of traditional Medicare fee-for-service. Medicare Advantage plan options include health maintenance organizations, preferred provider organizations, and private fee-for-service (PFFS) plans. Medicare Advantage plans are paid according to a formula established by the Congress in 2003 to ensure that seniors in all parts of the country — including rural areas — have access to private plan options.

This bill would reduce these options for beneficiaries, particularly those in hard-to-serve rural areas. In particular, H.R. 6331 would make fundamental changes to the MA PFFS program. The Congressional Budget Office has estimated that H.R. 6331 would decrease MA enrollment by about 2.3 million individuals in 2013 relative to its current baseline, with the largest effects resulting from these PFFS restrictions.

While the MMA increased the availability of private plan options across the country, it is important to remember that a significant number of beneficiaries who have chosen these options earn lower incomes. The latest data show that 49 percent of beneficiaries enrolled in MA plans report income of $20,000 or less. These beneficiaries have made a decision to maximize their Medicare and supplemental benefits through the MA program, in part because of their economic situation. Cuts to MA plan payments required by this legislation would reduce benefits to millions of seniors, including lower-income seniors, who have chosen to join these plans.

The bill would constrain market forces and undermine the success that the Medicare Prescription Drug program has achieved in providing beneficiaries with robust, high-value coverage — including comprehensive formularies and access to network pharmacies — at lower-than-expected costs. In particular, the provisions that would enable the expansion of “protected classes” of drugs would effectively end meaningful price negotiations between Medicare prescription drug plans and pharmaceutical manufacturers for drugs in those classes. If, as is likely, implementation of this provision results in an increase in the number of protected drug classes, it will lead to increased beneficiary premiums and copayments, higher drug prices, and lower drug rebates. These new requirements, together with provisions that interfere with the contractual relationships between Part D plans and pharmacies, are expected to increase Medicare spending and have a negative impact on the value and choices that beneficiaries have come to enjoy in the program.

The bill includes budget gimmicks that do not solve the payment problem for physicians, make the problem worse with an abrupt payment cut for physicians of roughly 20 percent in 2010, and add nearly $20 billion to the Medicare Improvement Fund, which would unnecessarily increase Medicare spending and contribute to the unsustainable growth in Medicare.

In addition, H.R. 6331 would delay important reforms like the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies competitive bidding program, under which lower payment rates went into effect on July 1, 2008. This program will produce significant savings for Medicare and beneficiaries by obtaining lower prices through competitive bidding. The legislation would leave the Federal Supplementary Medical Insurance Trust Fund vulnerable to litigation because of the revocation of the awarded contracts. Changing policy in mid-stream is also confusing to beneficiaries who are receiving services from quality suppliers at lower prices. In order to slow the growth in Medicare spending, competition within the program should be expanded, not diminished.

For decades, we promised America’s seniors we could do better, and we finally did. We should not turn the clock back to the days when our Medicare system offered outdated and inefficient benefits and imposed needless costs on its beneficiaries.

Because this bill would severely damage the Medicare program by undermining the Medicare Part D program and by reducing access, benefits, and choices for all beneficiaries, particularly the approximately 9.6 million beneficiaries in MA, I must veto this bill.

I urge the Congress to send me a bill that reduces the growth in Medicare spending, increases competition and efficiency, implements principles of value-driven health care, and appropriately offsets increases in physician spending.

                         GEORGE W. BUSH<BR>

THE WHITE HOUSE,

July 15, 2008.

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Bush will veto Medicare bill

By Larry Lipman | Thursday, July 10, 2008, 04:05 PM

President Bush intends to veto a Medicare bill that would avert a 10.6 percent pay cut for doctors, a White House spokesman said today.

The statement came a day after the Senate, on its third try, overcame procedural roadblocks set by the Republicans on a 69-30 vote — two more than necessary to override a veto.

Last month, the House passed the bill 355-59, well above the two-thirds margin needed for an override.

White House spokesman Tony Fratto told reporters at the daily noon briefing that Bush would veto the bill because he objected to the way Congress paid for averting the physician pay cut.

The bill would reduce payments to private managed care Medicare Advantage plans by nearly $14 billion over five years. Bush has previously opposed cuts in Medicare Advantage payments although the Medicare Payment Advisory Commission has repeatedly said the plans are overpaid.

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Kennedy vote breaks Medicare logjam

By Larry Lipman | Wednesday, July 9, 2008, 04:54 PM

With ailing Sen. Edward M. Kennedy casting a dramatic and decisive vote, the Senate cleared a procedural roadblock Wednesday and ultimately passed a Medicare bill that averts a 10.6 percent pay cut for doctors.

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Two weeks ago, with Kennedy absent after recovering from surgery to remove a malignant brain tumor, the Senate fell one vote short of agreeing to consider the bill. As a result, the scheduled cut went into effect July 1, but Medicare officials said they would not process any doctors’ claims for the first 10 days to give the Senate time to reconsider.

Escorted by Sen. Barack Obama, D-Ill., the Democrats presumptive presidential nominee, and several longtime Senate friends, Kennedy made a dramatic appearance in the Senate chamber during the roll call vote.

Senators on both sides of the aisle leapt to their feet and gave the senior senator from Massachusetts a raucous standing ovation. Among those sitting in the visitors gallery were Kennedy’s wife, Victoria, and his niece, Caroline Kennedy, daughter of President John F. Kennedy.

Kennedy, who has long been considered Medicare’s leading champion in the Senate, is one of only three currently serving senators who originally voted for the program in 1964.

With Kennedy’s vote assuring that the motion to proceed would reach the 60-vote threshold necessary to continue, 10 Republicans who had voted against considering the bill two weeks ago switched sides and voted to immediately bring it to a vote. Among them were Florida Sen. Mel Martinez and Georgia Sens. Johnny Isakson and Saxby Chambliss and Texas Sens. John Cornyn and Kay Bailey Hutchison.

That earlier vote cost Cornyn, at least temporarily, the endorsement of the Texas Medical Association Political Action Committee.

Both Texas senators said they voted for the legislation Wednesday because there was no time left to find a way to prevent the cuts. But both remained critical of the way Democrats handled the issue. Hutchison said the Democratic leadership should have allowed senators to make amendments to the legislation, while Cornyn said Congress still needs to come up with a long-term fix.

The medical association, which represents 43,000 doctors and medical students in Texas, praised both senators for switching their votes.

All of the Senate’s Democrats voted for the bill.

Sen. John McCain, the presumptive Republican presidential nominee, was the only senator who did not vote. McCain has not indicated how he would have voted.

The Senate then approved the bill — passed 355-59 by the House last month — on a voice vote and sent it to the White House where it faces an uncertain future.

President Bush has threatened to veto the bill because it cuts nearly $14 billion from private managed care Medicare Advantage plans over the next five years.

But Senate Majority Leader Harry Reid of Nevada urged Bush to reconsider his threat and said it would be difficult for Republican senators who voted in favor of considering the bill to uphold a veto.

At a news conference immediately following the bill’s passage, Reid said it could not have occurred without Kennedy’s vote, but he now believes the Senate has “more than enough” votes to override a veto.

The White House did not have an immediate reaction to the bill’s passage.

The bill had been overwhelmingly supported by groups representing doctors, hospitals and the elderly, but had been opposed by the managed care industry and the insurance industry.

Bill Novelli, chief executive officer of AARP, the largest organization of those 50 and older, hailed the Senate action and predicted it would “allow people in Medicare to maintain access to their doctors, improve benefits for low-income, prevention, and mental health programs, and boost quality through national e-prescribing.”

Novelli said he hopes Bush “recognizes the overwhelming bipartisan support that passed this bill in both chambers of Congress and signs it into law.”

Dr. J. James Rohack, president-elect of the American Medical Association, also urged Bush to sign the bill.

In addition to averting the scheduled 10.6 percent Medicare pay cut for physicians, the bill would suspend for 18 months a competitive bidding program for medical equipment that took effect in 10 metropolitan areas including Palm Beach, Broward and Miami-Dade counties.

Under that program, only medical equipment suppliers who submitted winning bids are approved to sell new equipment covered by Medicare. Some suppliers would be allowed to continue providing continuing service for items such as portable oxygen machines at reduced prices.

(Austin American Statesman reporter Jason Embry contributed to this story)

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Baucus: Gut sense of wiggle room on veto

By Larry Lipman | Monday, July 7, 2008, 02:26 PM

Senate Finance Committee Chairman Max Baucus just told reporters he has a “gut sense there is some wiggle room,” regarding President Bush’s threat to veto the House-passed Medicare bill that would avert a 10.6 percent physician pay cut.

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Baucus acknowledged he has not had any communications with the White House which would indicate that Bush would not follow through on the threat, but the senator said he would not describe the threat as “Shermanesque,” — there was “some daylight.”

Since the Senate came up one vote short of the 60 needed for cloture before it recessed two weeks ago, Baucus said he’s received indications from some GOP senators that they might change their vote if there is another cloture vote, possibly Wednesday or Thursday. But Baucus wouldn’t say which senators have indicated they might switch.

Baucus said the president may be dissuaded from vetoing the bill depending on the size of the vote. The House passed the bill with a 355-59 veto-proof margin last month.

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