House and Senate Pass Medicare Bills; House Votes
Positive 2004-05 Updates
Michael Scott, J.D., Director
Governmental and Legal Affairs
Acting almost simultaneously in the early morning
hours of June 27, the House and Senate passed separate
versions of Medicare reform legislation designed
to add a drug benefit to the program. The Senate
bill passed easily, 76-21, but the House bill passed
by only one vote, 216-215. Closeness of the House
vote resulted from dissatisfaction on the part of
many Republican conservatives who believed that
the bill did not go far enough in encouraging private
options for Medicare drug coverage and traditional
services.
Congressional leaders have expressed their intention
to have differences in the two bills worked out
in conference prior to the August recess, but as
this column is written, this deadline appeared to
be eroding. Major concessions will be necessary
by both proponents of the traditional Medicare program
as an entitlement for all seniors and those who
would shift the program away from government monopoly
and more into the private marketplace for health
care coverage.
For physicians, passage of the two bills included
both good news and bad news. On the positive side,
congressional action clearly represented a positive
step toward elimination of the negative 4.2-percent
reimbursement cut projected by the Centers for Medicare
& Medicaid Services for 2004. Thus, the House
version called for positive updates of at least
1.5 percent in each of 2004 and 2005; although no
parallel provision was contained in the Senate version,
that body passed two “Sense of the Senate”
resolutions acknowledging the need to deal with
the physician reimbursement problem.
Physicians should further be pleased that both bodies
passed provisions that, if enacted, would accomplish
several of the regulatory reforms in connection
with Medicare administration sought by organized
medicine over the past three years. Again, substantial
work will be required in conference to reconcile
the two versions, but at present, it appears rather
clearly that significant regulatory reform will
be a part of any bill emerging from conference.
Of significant interest to most physicians is the
provision contained in the Senate bill that would
raise the floor on geographic adjustment for the
physician work, practice expense and liability cost
components of reimbursement under the Medicare fee
schedule. The House bill, by contrast, would raise
the floor somewhat more modestly on the physician
work components only. Both these provisions are
designed to provide additional compensation to physicians
working in rural areas, but concern has been expressed
that their inclusion in any final bill would serve
to limit the update that might ultimately be voted
for all physicians.
Of serious concern to physicians, on the other hand,
is the provision in the House bill — not appearing
in the Senate bill — authorizing the Health
and Human Services Secretary under certain conditions
to place a new medical procedure coding system into
place, replacing the current Current Procedural
Terminology-4™ codes, within a year after
enactment of the legislation. The concern results
from the fact that rather than the current 8,000
codes already in use, physicians would be required
to deal with some 170,000 new codes. Preliminary
analysis also suggests that because anesthesiologists
were not involved in developing the new codes, coding
problems would be particularly acute for descriptions
of anesthesia services.
Also of interest is the fact that both bodies seem
to have agreed that electronic prescribing of medications
should be required. At first blush, this requirement
would seem to be of only modest significance to
anesthesiologists practicing surgical anesthesia
in the operating room setting, but those maintaining
a pain management practice will undoubtedly be affected.
In general, it appears that there is at present
considerable political momentum behind reform legislation.
The president has been forceful in his requests
that Congress develop a bill, and without question,
passage of a new drug benefit for seniors —
however modest — would represent a “win”
for him with most voters.
Senate Rejects Cloture on
Liability Reform Bill
On July 9, the GOP Senate leadership effort to block
a filibuster on federal professional liability reform
fell short by 11 votes of the 60 necessary to invoke
cloture. The reform bill, S. 11, would have capped
noneconomic damages at $250,000 and imposed a number
of additional restrictions on professional liability
cases. In almost all respects, the bill was identical
to that (H.R. 5) which passed the House last March
by a comfortable margin.
No Democratic Senator voted in favor of cloture.
Two Republicans, Lindsey O. Graham (R-SC) and Richard
C. Shelby (R-AL), also opposed it.
The Senate cloture vote was not a surprise. Various
prior counts of Senators in favor of a House-type
bill had numbered between 45 and 47. Senate Majority
Leader Bill Frist (R-TN) vowed shortly after the
vote, however, to bring S. 11 up again later in
the year in an effort to continue pressure on Senate
Democrats in the context of widely reported public
support for liability reform.
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