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Senate aims to increase provider Medicare funds


WASHINGTON - Just weeks after rejecting proposals to help the elderly with prescription drug costs, the Senate is poised to increase Medicare payments to doctors, hospitals, nursing homes and health maintenance organizations.

Consumer advocates are furious at the prospect that Congress will address the needs of health care providers without doing anything on prescription drugs, and their anger is putting political pressure on Congress to try again to pass at least a modest drug bill this year.

The Senate majority leader, Tom Daschle, a South Dakota Democrat; Sen. Max Baucus, a Montana Democrat and chairman of the Finance Committee; and Sen. Charles E. Grassley of Iowa, the senior Republican on the panel, all said they expected Congress to pass a bill increasing Medicare payments to health care providers this year.

But Daschle said he was "skeptical and very pessimistic" that the Senate would approve legislation adding drug benefits to Medicare this year. About one-third of the 40 million Medicare beneficiaries have no insurance to cover drugs.

Provider groups have spent tens of millions of dollars on advertising and lobbying to persuade lawmakers that they need more money from Medicare to cover their costs. Dozens of lobbyists for health care providers descended on Capitol Hill to press their case as Congress returned from its recess this week.

Baucus said "there is a high likelihood" that Congress will respond to the pleas of doctors, hospitals, nursing homes and other providers.

Health care providers are, in effect, competing with beneficiaries for the same pot of Medicare money. AARP, the influential lobby for the elderly, says Congress should not increase payments to providers without first ensuring that older Americans get prescription drug coverage.

"I'm not saying there's no legitimacy in claims of some provider groups," said John C. Rother, policy director of AARP, "but Medicare beneficiaries have been waiting a very long time, and their needs are urgent."

President Bush agrees. The White House has told Congress that new money should be used for "the president's top priority," improving benefits and coverage options, not for payments to providers in the original fee-for-service Medicare program.

On Oct. 1, spending limits set by Congress expire. In theory, that could make it easier for the Senate to pass a Medicare drug bill, but it could also make it easier for Congress to pass additional tax cuts. If the opponents of either drug benefits or tax cuts waged a filibuster, 60 votes would be needed to end debate.

The House Medicare bill, besides offering drug benefits to the elderly, would increase payments to most health care providers.

The House bill, passed in June, would increase Medicare payments to hospitals by $14 billion over 10 years. Hospital lobbyists are seeking twice that amount in the Senate.

With no change in existing law, Medicare payments to home health agencies will be cut 4.9 percent on Oct. 1, and payments to nursing homes will be reduced 10 percent.

Republican Sen. Susan M. Collins of Maine said: "The provider reimbursement bill may be the vehicle for another attempt to get a prescription drug benefit through Congress. I hope so. I see drug benefits as absolutely imperative."

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