Bush administration delaying Medicare fee cut

By: AP
By: AP

WASHINGTON (AP) -- The Bush administration said Monday it will delay paying doctors for treating Medicare patients in early July to give Congress more time to block a scheduled 10.6 percent fee cut.

The move by the Centers for Medicare and Medicaid Services doesn't block the cut, scheduled to take place Tuesday. It's up to Congress to decide that.

But to give Congress more time to act, the agency will instruct its contractors to delay the processing of any physician or non-physician Medicare claims for health care services given during the first 10 business days of July. Claims for services received on before June 30 will be processed as usual.

CMS will not be making any payments at the 10.6 percent reduced rate until July 15, at the earliest, agency spokesman Jeff Nelligan said. The delay in processing claims likely means that claims that would have been paid mid-July won't be paid until late in the month.

Another option would have been to issue on-time payments at the lower rate and pay the rest later after Congress fixes the problem.

Congress, facing the prospect of millions of angry seniors at the polls in November, will be under tremendous pressure to act quickly when it returns to Washington the week of July 7 to prevent the cuts in payments for some 600,000 doctors who treat Medicare patients. The cuts were scheduled because of a formula that requires fee cuts when spending exceeds established goals.

But Senate Republicans and the White House are in a standoff with Democrats seeking to cut subsidies to insurance companies that provide Medicare coverage to "pay for" easing the payment cuts to doctors. There's no guarantee the standoff will be broken soon.

Lawmakers on all sides promise that if the impasse goes on and doctors receive the lower payments, they'll get repaid retroactively through automatically reprocessed claims. That's more difficult than it sounds, given the millions of Medicare claims that have to be processed every day. A comparable situation that occured in early 2006 took six months to fully fix.

HHS Secretary Mike Leavitt had promised Friday that his agency "will take all steps available to the department under the law to minimize the impact on providers and beneficiaries." On Monday, the department used its administrative tools to delay implementing the scheduled 10.6 percent cuts.

Democrats on Capitol Hill say that the administration is following existing anti-fraud rules that require a two-week delay before most Medicare payments to doctors can be paid anyway. Republicans say the real issue is processing of claims, not the payment of them.

Almost every year, Congress finds a way to block the automatic Medicare cuts. But last week the Senate fell just one vote short of the 60 needed to proceed to legislation that would have stopped the cut.

In a particularly vitriolic exchange, Democrats and Republicans blamed each other for what Dr. Nancy H. Nielsen, president of the American Medical Association, said has put the country "at the brink of a Medicare meltdown."

"Seniors need continued access to the doctors they trust. It's urgent that Congress make that happen," the AMA said in ads taken out in Capitol Hill newspapers read by members of Congress and their aides.

Doctors have complained for years that Medicare payments have failed to cover rising costs.

This year, majority Democrats homed in on cutting the Medicare Advantage program, which is an ideological issue for both parties. The Bush administration and Republicans like Medicare Advantage because it lets the elderly and disabled choose to get their health benefits through private insurers rather than through traditional Medicare. Democrats argued that government payments to the insurers are too generous.

The White House warned that President Bush would be urged to veto a bill that contained cuts to Medicare Advantage.

That didn't stop the House last Tuesday from approving the legislation 355-59, well above the margin needed to override a veto. Every Democrat supported it, and Republicans, bucking their president, voted 129-59 for it.

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Associated Press writers Kevin Freking and Andrew Taylor contributed to this report.

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The bill is H.R. 6331.

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