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How Medicare legislation is made in the real world

From the June ACP-ASIM Observer, copyright © 2002 by the American College of Physicians-American Society of Internal Medicine.

By Robert B. Doherty

When I was a schoolboy in the 1960s, I learned about the legislative process from a civics textbook.

It went something like this: A concerned citizen writes to his or her legislator about a problem. The legislator looks into the problem and decides to introduce a bill to address it. The bill is referred to a congressional committee for a hearing to get the views of interested parties.

After the hearing, the committee considers changes to the bill, then brings the bill to the full House or Senate for a vote. This full body of legislators expresses views on the bill and a vote is taken. A similar process occurs in the other chamber. Once both chambers pass the bill in the same form, they send it to the president for his signature.

It sounds like a pure and simple process, but in reality, the civics books got it only partly right. There is much more to legislation than what we were taught in grade school.

The real world

Textbooks never explained how rarely bills are voted upon separately, on their own merits. More often than not, individual bills are packaged with a grab bag of complex legislative changes, and members of Congress must vote for or against the entire package. Because the package may include a myriad of controversial changes, each of which is heavily lobbied by outside groups, members of Congress often have to hold their noses and vote for objectionable provisions so that favored provisions can see the light of day.

My civics textbook also failed to do justice to the difficulty of deciding when to compromise. By the time a bill is ready to be voted on, it has likely been watered down through the give-and-take process. Deciding whether to accept a compromise or risk everything by holding out for better legislation is never an easy choice.

So what does all of this mean for internists? Issues like legislation to restore cuts in Medicare payments to physicians are decided in the real world of Washington politics, not the idealistic world of a sixth-grade civics classroom.

When is a compromise enough?

At the beginning of this year, Medicare payments to doctors, nurses and other health professionals were cut 5.4% below last year's rates. This occurred even though two-thirds of Congress had co-sponsored legislation, supported by ACP-ASIM, that would have averted the cut. Because the bill was not scheduled for a floor vote, the reduction went into effect on Jan. 1, 2002.

To make matters worse, the Centers for Medicare and Medicaid Services projected that unless Congress changed the formula that determines reimbursement updates for physician services, Medicare fees would drop as much as 20% from 2002 to 2005.

ACP-ASIM, the AMA and other medical organizations have lobbied for the past five months for legislation that would reverse the 5.4% reduction and permanently change the formula to halt further cuts. Key members of Congress listened, and we succeeded in getting bills introduced that would have accomplished both ends.

But when it came time for the House of Representative to vote on the issue, it was offered a compromise version that would replace the 20% cut in Medicare payments with modest increases—2% to 2.5% per year—over the next three years. Technical changes would be made in the formula to ease the cuts. The changes, however, are temporary. Unless Congress revisits the issue and makes further changes within the next three years, the original flawed formula will come into play yet again.

Why did the compromise fall short of our original objectives? The answer comes down to money. Lobbyists are vying for a limited pool of Medicare dollars, and the Bush administration doesn't want to "bust the budget" to give Medicare more funds.

Doctors want a halt to the physician payment cuts. AARP wants a prescription drug benefit. Medicare HMOs want a raise. Teaching hospitals want to freeze further cuts to medical education funding. The list of groups asking for more Medicare money goes on and on.

Packaging pay with prescription drugs

Republicans that control the House Ways and Means Committee crafted the Medicare compromise and decided they could provide only some of the money interest groups demanded. The prescription drug benefit is far less generous than AARP sought. Hospitals would get only 80% of the increase they want.

Because Congress determined that the cost of fully restoring physician payments was too high, the compromise provides relief for only three years. Congressional leadership promises to revisit the issue in the future, before Medicare automatically reverts to the original flawed formula.

To further complicate matters, the Medicare physician payment provisions were packaged with a controversial proposal to add prescription drug coverage and modernize the Medicare program. Most House Democrats opposed the package, arguing that it did not provide generous enough drug coverage. Senate Democrats promised to produce a better drug package, but it is doubtful that their generosity will extend to doctors needing greater relief from fee cuts.

For groups like ACP-ASIM, the decision to support the compromise came down to difficult political and practical considerations. If we hold out for something better, are we more likely to succeed, or do we risk ending up with nothing?

What the future holds

When this article went to press, the House Ways and Means Committee had not yet voted on the compromise Medicare package. Even if the committee passes the bill, it is unclear whether it will garner enough votes in the full House to pass. Prospects in the Senate are even murkier.

ACP-ASIM will continue to do everything possible to get the best outcome for members—including the maximum relief from fee cuts. This will require tough decisions about when to compromise, when to hold out for something better, and whether we can support other parts of a package that includes our favored provisions.

Making tough decisions like this, though, is what College members expect us to do. If crafting legislation was really as simple as civics books say, you wouldn't need a skilled cadre of advocates in Washington. But the real world of crafting legislation requires nothing less.

Robert B. Doherty is ACP-ASIM's Senior Vice President for Governmental Affairs and Public Policy.

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