Currently, the Senate Finance committee is attempting to put together a bill to determine payments to physicians for 2008. The current number being bandied about is a 15.1% cut in pay for physician services spread out between 2008 and 2009. The cut would start with a 10.1% cut for 2008 followed by a 5% cut for 2009.
As it stands right now, Finance Committee Chairman Max Baucus wants a package that avoids these cuts entirely, while Charles Grassley, the ranking minority member of the committee, wants a one-year suspension for 2008 and the entirety of the cut to come in 2009.
In the past, what has invariably happened at this time of year goes as follows. The desired cut is announced by the Centers for Medicare & Medicaid Services (CMS). Through a combination of AMA lobbying, book cooking and the desire to pass the buck, the desired cut doesn’t appear in the budget and gets put off another year.
At the point that payments to physicians are about to be cut by 15.1%, it can be safely stated that the day of reckoning has arrived. As expected, when a budgetary emergency presents itself, every special interest cockroach comes out of the woodwork to claim the crumbs. Already, 30 senators from both parties have signed a letter that was sent to the committee asking that no cuts be applied to radiology services.
By far, the biggest stumbling block (as if we should be surprised) is Senate Republicans.
Max Baucus has a good plan. He wants to suspend the pay cut to physicians and replace that funding by reducing the payments made to insurance carriers for administrating Medicare Advantage plans. Senate Republicans, having never met a corporate welfare plan they didn’t like, are backing Grassley’s plan instead.
A Medicare Advantage plan, sometimes called a Medicare Fee for Service plan, works somewhat like a standard commercial insurance plan. They cover (in theory if not always in practice) everything that Medicare covers, plus additional benefits like routine physicals at the administrator's discretion.
Since the introduction of the Medicare Part D drug benefit, enrollment in Medicare Advantage plans has exploded. When a Medicare recipient looks for a carrier to handle their Medicare Part D coverage, they are looking for a carrier and a plan that includes the litany of drugs the patient is taking into one formulary. The recipient does not commence this process looking to change their base Medicare coverage from traditional Medicare to a Medicare Advantage plan, but this happens frequently. The sales pitches put forward by many of these plans remind me a lot of the days of long distance phone carrier "slamming". Most recipients don’t realize that they need not switch their basic Medicare coverage to be enrolled in a Medicare Part D plan.
When Medicare Part D came into existence, the focus of the budget busting affects of the program seemed to be focused on the enormous giveaway it represented to the pharmaceutical industry with regard to "Average Sale Price" versus "Average Wholesale Price". The dollars paid to insurance carriers for the administration of Medicare Advantage plans in many instances is just as crippling. It is yet another example of the billions of dollars funneled to Corporate America under this president.
The ramifications of a 15% pay cut to physicians are already being made abundantly clear. Doctors, via the AMA, are already announcing that they may close their practices to new Medicare patients if the cuts are approved. This would be just in time for the Baby Boomers who will begin turning 65 in 2010 to be left out in the cold for primary medical care.
Republicans have made it their mission to starve Medicare and Social Security of needed funds until both can no longer function in any form, leading to what they hope will be their eventual demise. People like Newt Gingrich and Grover Norquist have made this very clear publicly over the last 15 years. It is now clear that while they attempt to destroy both, they might as well perfect a form of legal embezzlement of funds to their friends in the insurance and pharmaceutical industry.
Baucus wants to stop a portion of the bleeding of funds with the next bill. While this doesn't address the big hemorrhage to the pharmaceutical industry, it can be at least viewed as a start. Whether he has enough Roach Motels at the ready remains to be seen.