Senate panel denounces new Medicare fee schedule


WASHINGTON -- The Senate Finance Committee yesterday denounced a new Bush administration Medicare fee schedule, saying it would reduce repayments to physicians overall in direct violation of Congress' intent.

The proposal, designed to implement congressional Medicare reform measures passed in 1989, is a "betrayal" of congressional intentions, said Sen. John D. Rockefeller IV, chairman of the Subcommittee on Medicare and Long-Term Care. Mr. Rockefeller told federal officials testifying before the panel that he was "shocked and surprised" by the reduction plan unveiled some eight weeks ago.

Mr. Rockefeller, a West Virginia Democrat and potential presidential candidate, and other prominent Democrats are pushing to make health care a dominant issue in the 1992 presidential campaign. Medicare serves about 34 million elderly and disabled Americans.

"Many of our intentions have not been realized," Mr. Rockefeller said. "In fact, in some instances, the opposite is being proposed. In all, we are very short of our initial goals."

Congress wanted the new fee schedule neither to increase nor decrease federal Medicare spending, committee members said, but rather to redistribute the Medicare dollar to pay general practitioners more and surgeons and other specialists less, thereby providing greater financial incentive for physicians to enter primary-care practice.

But the administration's plan would ultimately cut $6.9 billion from Medicare physician repayments. Committee members said

the cut stemmed from a miscalculation of certain health-care service costs.

Federal officials did not recognize the problem until recently, despite a congressional study released in February. The study was conducted by the Physician Payment Reform Commission, a group formed to advise Congress.

Dr. Gail Wilensky, head of the Health Care Financing Administration (HCFA), told the panel that "we do recognize it was not Congress' intent" to pass a cost-cutting bill. She said the cut was an unforeseen effect of the transition mechanism.

Dr. Wilensky insisted that she believes the fee schedule is based on the "correct interpretation of the law." But, in answer to questions from committee Chairman Lloyd Bentsen, D-Texas, she conceded that HCFA's general counsel is reviewing other interpretations of the law.

"All of this suggests to me that you did not know the dimensions of this problem until very recently," Mr. Bentsen said.

According to pay-as-you-go budget rules, if the cut were to be restored, the budget would have to be balanced either by a cut in Medicare services or an increase in taxes. And Mr. Bentsen said he would not want to redress the shortfall by raising taxes.

Fourteen of the 19 senators on the committee sent a letter June 28 to Dr. Louis Sullivan, the secretary of health and human services, expressing concern over the potential impact of the administration proposal. In addition, the American Medical Association, the American College of Family Physicians and other medical groups have criticized the plan.

According to the AMA, the fee schedule would take money away from surgeons and other specialists but would not funnel the difference to primary-care doctors.

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