Congress on July 15, 2008 overrode President Bush's veto of legislation to block a physician pay cut. The Medicare Improvements for Patients and Providers Act of 2008 (HR 6331) (PubLNo 110-275) removes a 10.6 percent physician pay cut in current law scheduled to take effect on July 1 and increases their pay by 1.1 percent in 2009. In addition, the legislation decreases payments to Medicare Advantage plans. The House vote to override the president's veto was 383 to 41 and the Senate voted 70 to 26 to override.
Veto message
In a veto statement, President Bush said he supported the physicians pay measures, but opposed the cuts to Medicare Advantage (MA) plans, saying they will reduce beneficiary choices and decrease enrollment. The Congressional Budget Office estimated enrollment would decline by about 2.3 million in 2013 compared to the current baseline.
"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," Bush said. He added that the MA overpayments, part of the 2003 Medicare Modernization Act (MMA) (PubLNo 108-173), ensure that seniors in all parts of the country -- including rural areas -- have access to private plan options.
In addition, Bush said the bill would undermine the Medicare prescription drug program. Provisions to 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," said Bush.
MA and DME competitive bidding program
The legislation phases out payments to MA organizations for the costs of indirect medical expenses currently paid both to hospitals and plans and requires private-fee-for-service (PFFS) plans to establish provider networks for both individual and employer-group products. Individual PFFS plans in areas with fewer than two network plans are exempted. The legislation also extends and modifies the authority for MA organizations to offer plans for special needs individuals. It also depletes the MA Stabilization Fund from $1.79 billion to a balance of $1 to offset the bill's costs.
In addition, the legislation includes incentives to physicians for using a qualified e-prescribing system, a requirement that drug plans reimburse pharmacies within 14 days for electronic claims, an increase in low-income assistance for Medicare beneficiaries and an extension of the exceptions process for Medicare Therapy Caps through December 31, 2009.
In addition, the legislation delays for 18 months the competitive bidding program for durable medical equipment (DME). Bush said the legislation would "perpetuate wasteful overpayments to medical equipment suppliers."
Senate Finance Committee ranking member Charles Grassley (R-Iowa) was disappointed Democrats did not work with Republicans on a compromise plan that would have reduced MA overpayments, but also could have avoided some of the bill's pitfalls, such as the expansion of protected classes of drugs. He said the provision will "tie the hands of the Medicare Part D plans resulting in higher drug prices and higher premiums on seniors." He added that the physician pay increase was a result of GOP initiative.
Source: CCH Washington Bureau, July 15, 2008.
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