Funding pools OK'd for Medicare doctor pay, SCHIP

Congress still must pass appropriations bills that would authorize the actual spending.

By David Glendinning and Doug Trapp, AMNews staff. June 11, 2007.

Washington -- Congress adopted a $2.9 trillion budget blueprint late last month with provisions to allow lawmakers to prevent Medicare physician reimbursement cuts more easily and to double spending for the State Children's Health Insurance Program.

The May 17 House and Senate votes on the fiscal 2008 budget resolution -- which serves as a guide to congressional spending but does not provide funding -- fell mainly along party lines. Many Republicans objected to the measure, not because of its health care provisions, but because it would let some tax cuts expire.

The budget resolution establishes a reserve fund that lawmakers could use to boost physician reimbursement rates or provide financial incentives for doctors to improve the quality of their care. A dedicated fund would prevent opposition lawmakers from using congressional budget rules to block legislation that would accomplish these goals.

The provision does not set a limit on how much money lawmakers can set aside for the fund when they develop actual appropriations legislation. Preventing next year's roughly 10% cut alone is expected to cost billions.

But the physician payment set-aside is budget neutral, meaning that it will be dropped if its appropriations legislation would increase the federal deficit. This condition, combined with the Democratic leadership's commitment to following "pay as you go" rules on new federal spending, forces Congress to find other places to cut Medicare to cover the cost of preventing the physician payment cuts.