Congress overrode a veto of legislation on July 15 that canceled a cut in Medicare payments to doctors scheduled to go into effect July 1.
Restoring the payments to doctors and providing an increase in their fees over the next 18 months was partially paid for by cutting the Medicare Advantage program provided by health insurers by approximately $12.5 billion over 5 years.
The Congress acted within several hours of President Bush’s decision to veto the legislation because he opposed the cuts to the Medicare Advantage program.
The president said in his veto message that he objected to the bill because it was “fiscally irresponsible” and relied on “short-term budget gimmicks” that do not address the long-term fiscal soundness of the Medicare program.
It marked the fourth time Congress has overridden a presidential veto.
The House voted, 383 to 41, on the afternoon of July 15 to override the veto. Within hours, the Senate voted 70 to 26, much closer but still more than the two-thirds vote needed to override a veto.
However, because of the complex way the Medicare program is funded, the payment fix for doctors under Medicare is only for 18 months. And, unless dealt with again, the payments would be cut by 20% unless Congress acts further.
In a statement, Robert Zirkelbach senior manager, media relations, for America’s Health Insurance Plans, Washington, said, “It is unfortunate that Congress chose to cut the Medicare Advantage program that seniors rely on.”
He says seniors enrolled in Medicare Advantage could face reduced benefits, higher out of pocket costs and limited healthcare choices from these cuts. But, he noted, “This is only for 18 months. We think that Congress needs to have a larger debate as to how to fix the physician payment formula rather than going through the back door every couple of years to fix the cut and cut programs like Medicare Advantage that pay for the fix.
“We would hope that Congress would work on a long term fix for the physician payment formula in the next Congress,” Zirkelbach adds.
The Congressional Budget Office projects that about one in five of Medicare’s 44 million enrollees is signed up for a Medicare Advantage plan. The federal health program is expected to pay $86 billion this year for the plans.
The cuts that will pay for the temporary fix in physicians’ pay under Medicare are centered in the Medicare Advantage private fee-for-service program. CBO and GAO studies estimate that this program costs an average 17% per patient more then Medicare spends to provide benefits directly.
The bill mandates that this type of Medicare Advantage plan create provider networks, instead of assuming that all doctors and hospitals that take Medicare are part of the plan.
The change would cause some plans to close and beneficiaries to choose other Medicare options, according to a report by the Congressional Budget Office.
The bill would also require Medicare to stop paying private plans extra for patients treated at teaching hospitals. These facilities already receive extra payments to cover their higher cost.