Hurricane costs: Cleanup bill shuffles health budget priorities

Relief efforts push Medicaid to center stage and complicate consideration of legislation on Medicare physician pay updates.

By David Glendinning, AMNews staff. Sept. 26, 2005.

Washington -- The ripple effects of Hurricane Katrina that have reached Capitol Hill have raised concerns about the impact to physicians once next year's Medicare reimbursement checks start arriving. But the AMA says Medicare payment reform is still possible.

Congress postponed until October consideration of budget reconciliation bills that serve as one of the likely vehicles for a measure to stave off the upcoming Medicare cuts. Lawmakers instead shifted their immediate focus to the complex task of seeking recovery funding for hurricane-affected areas and providing assistance for people the disaster displaced.

When they do return to the table to discuss long-term health care spending, lawmakers could face an altered set of priorities when it comes to Medicare physician pay, said Senate Majority Leader Bill Frist, MD (R, Tenn.). In the immediate aftermath of the crisis, Medicaid relief has taken precedence as the nation grapples with how to address the public health care needs of evacuees.

"I pushed the reconciliation back in part to see what the needs are, to see where there can be reductions in [entitlement] spending growth and to see where savings can come from," he said. "I'm sure there'll be talk about physician payments and about whether to throw them into the discussions about the inner mixing of Medicare and Medicaid. Right now we're just catching our breath and focusing on Medicaid."

Dr. Frist said no decisions had been made, but aides and lobbyists familiar with the budget negotiations said available funding for physician reimbursement was becoming even more elusive as the initial bill for the hurricane damage crept over the $60 billion mark. Congress would need to find scarce billions of dollars elsewhere even to turn next year's projected 4.3% Medicare reduction into a modest increase.