Doctors' Medicare rate cut is delayed

WASHINGTON - Physicians will get a six-month reprieve from a 10 percent rate cut when treating Medicare patients under legislation that passed the Senate yesterday.

The pay cut for doctors had been scheduled to take effect Jan. 1. Doctors had warned that a cut in reimbursement rates would lead to physicians' taking on fewer new Medicare patients. Instead, doctors will get a 0.5 percent raise when they treat the elderly and disabled.

The legislation, crafted by leaders of the Senate Finance Committee and approved on a voice vote, also would extend funding for a children's health insurance program through March 2009.

Large majorities in both chambers supported spending an additional $35 billion on the State Children's Health Insurance Program, bringing total spending to $60 billion over five years. President Bush twice vetoed expansions of the program; supporters were unable to muster enough support in the House to overcome the first veto. Supporters will try to override the second veto when they return in January.

Some advocacy groups, such as the AARP, described the Medicare legislation that passed the Senate as inadequate. They had hoped Congress would substantially lower payments to private insurers serving Medicare beneficiaries. Savings from those cuts would be used to pay for other programs that they wanted, such as increasing the number of people eligible for the low-income subsidy in the Medicare drug benefit.

Insurers argued that a cut in their reimbursement rates would result in benefit cuts for many of the eight million elderly getting their health coverage through managed care.

Officials with the American Medical Association said a six-month fix creates uncertainty for Medicare patients and physicians. It urged lawmakers to shelve the funding formula that has annually caused lawmakers to pass legislation avoiding a Medicare pay cut.

Under the compromise, lawmakers would trim $1.5 billion from a fund established for certain insurers that entered previously unserved regions.

The higher reimbursement rates for doctors is expected to cost about $6 billion.

Lawmakers would offset that cost primarily by freezing payments for inpatient rehabilitation care and for prescription drugs delivered by physicians through Medicare Part B.

Inpatient rehabilitation facilities commonly treat patients suffering from stroke, arthritis and spinal cord or brain injuries. The medicines delivered by physicians are the kind routinely provided at a doctor's office, such as injections to treat cancer or anemia.