No Medicare change, no health bill, say Democratic lawmakers

McClatchy NewspapersJanuary 17, 2010 

WASHINGTON — Lawmakers have told congressional leaders they won't support a health care bill unless it overhauls a complex Medicare reimbursement formula that for years has shortchanged doctors and hospitals in Washington state, which provide medical care to more than 780,000 seniors.

The changes should make it easier for Medicare patients in Washington to find and keep doctors. It may also help attract additional doctors to Washington state.

The lawmakers — including three Democrats from Washington state, Sen. Maria Cantwell and Reps. Norm Dicks and Jay Inslee — told congressional leaders that they expect the changes to become part of the what could be a historic health care bill being negotiated with the White House.

In a letter late last week to House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, the lawmakers warned their support for the broader health care bill was contingent on it including strong modifications to the Medicare reimbursement formula.

"As you know, the current Medicare payment structure rewards inefficient providers and penalizes those who do not order unnecessary tests and services," the lawmakers said in the letter — also signed by Sen. Amy Klobuchar, D-Minn., and Reps. Bruce Braley, D-Iowa, Ron Kind, D-Wis., and Betty McCollum, D-Minn. — obtained by McClatchy.

"Health care reform must live up to its promise of providing patients a more efficient, higher quality health care system," the letter said.

Cantwell, Inslee and Dicks have successfully worked behind the scenes to meld the significantly different approaches the House and the Senate took in dealing with the Medicare fee issue.

Since the beginning of the health care debate, Washington state's lawmakers have said that changing the 45-year-old formula was their top priority.

The reimbursement rate in Washington is among the lowest in the nation because the state has a "high-quality, low-cost" medical system compared with other states. The current system rewards inefficient doctors who are often too quick in prescribing additional tests and procedures, critics say.

Nearly 30 percent of Washington state's 6,200 physicians are not taking new Medicare patients or have decided to drop all Medicare patients because of the low payments, according to a survey last year by the Washington State Medical Association. That could grow to 51 percent unless changes were made, the survey found.

With Medicare responsible for one in every five dollars spent on health care, the switch from a "fee-for-service" based formula to a one that favors quality and lower costs could save Medicare $100 billion a year and help drive down costs throughout the nation's health care system.

"We are trying to do health care reform rather than insurance company reform," said Inslee, who was one of the lead negotiators in the House.

Cantwell is credited with convincing the Senate Finance Committee to address the Medicare reimbursement problem. The initial bill proposed by the committee's chairman, Sen. Max Baucus, D-Mont., didn't address the issue.

Both Cantwell and Inslee lobbied President Barack Obama and other White House officials.

"For the first time, health care providers in Washington state will no longer be penalized for doing the right thing, using innovative delivery to provide patients with higher quality care at more reasonable cost," Cantwell said. "This change should increase the number of Medicare providers and make them more accessible to our seniors."

In a nutshell:

  • The average yearly cost for Medicare patients in Washington state was $7,110 in 2006, roughly $1,200 less than the national average, according to the Dartmouth Health Atlas, which tracks Medicare spending. Newer data is not available.
  • Thirty-four states have higher per person Medicare costs than Washington state.
  • Six states have per person Medicare costs of more than $9,000 — Florida, Louisiana, Massachusetts, New Jersey, New York and Texas. New York was the highest at $9,564.
  • An article in New Yorker magazine, which was required reading at the White House and on Capitol Hill, found the per-person Medicare costs in McAllen, Texas, was $14,946. Other reports said Medicare spent $16,351 per enrollee in Miami in 2006.

"Right now, our medical system is rewarding an almost relentless utilization," said Cantwell, likening the situation to a waiter in a restaurant "bringing everything to your table whether you order it or not or whether you could consume it or not."

The Senate approach would require federal regulators to rewrite the formula to take into account a new "value based index," which would recognize efficiencies, quality and results rather than just the number of medical procedures and tests preformed. It would take until 2017 for the changes to fully kick in because of requirements, such as public comment periods, governing the adoption of a new federal rule.

The House bill would likely end up in the same place, but it would first require two studies by the Institute of Medicine and, though it would take a supermajority, Congress could block some of the revisions in the formula. The House version also provides $4 billion annually to pay for ending existing geographic inequities.

Some lawmakers remain concerned that the changes in the Medicare reimbursement rate will not lead to a large enough reduction in overall health care costs.

"It's limited," said Rep. Adam Smith, D-Wash. "It's a step in the right direction but I don't think it is a big enough one."

McClatchy Newspapers 2010

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