Medicare pay raise OK'd, but deal hinges on non-Medicare issues

Passage of a 1.6% increase depends on Congress' ability to compromise on drought relief and subsidies to loggers and fish farmers.

By Markian Hawryluk, AMNews staff. Feb. 24, 2003.

Washington -- Physician groups are hopeful that relief from a second consecutive year of Medicare cuts is within reach but are trying not to count their chickens -- or catfish -- before they're hatched.

At press time, a deal was in place to replace the 4.4% cut in Medicare payments to physicians, scheduled to go into effect in March, with a 1.6% increase.

House and Senate lawmakers trying reach agreement on a massive spending package to fund the federal government through the end of the fiscal year agreed to include the physician payment fix in the final version of the bill.

However, the fate of the increased payment still depended on lawmakers' ability to craft compromises on the remaining issues in the package -- including drought relief, an expansion of logging in the Northwest and even subsidies for catfish farmers -- that were approved by the Senate but opposed by many in the House.

"While we recognize that nothing is final until the omnibus [spending] bill is passed, what we are hearing about congressional negotiations on the Medicare physician payment issue is very good for seniors and the physicians who care for them," said Yank D. Coble Jr., MD, president of the AMA. "America's seniors should not pay for the government's mistakes, and we are encouraged that both President Bush and Congress recognize that and have pledged to fix the problem."

The measure would increase Medicare's physician payments by $49 billion over the next 10 years, including as much as $2 billion in spending through September alone. The agreement is similar to a measure introduced by Rep. Bill Thomas (R, Calif.) last year that would have indemnified the Bush administration from lawsuits if it chose to correct certain projection errors in the formula.