By SCOTT GOTTLIEB
Posted: 3:23 am
July 10, 2008
THE American Medical Association launched an ad blitz last weekend, charging a handful of GOP senators with imperiling the nation's elderly.
It worked: The Senate yesterday passed the Medicare bill in question - which raises fees paid to doctors but cuts subsidies to private health plans. President Bush will veto it - but the votes seem to be there to pass it into law anyway.
This pitting of insurers against health-care providers for pieces of the Medicare pie is now an annual Washington event. Yet, while various interests battle over narrow slices of political terrain, everyone ignores systemic problems that lower the quality of care.
This bill will push off cuts to the fees physicians get paid for seeing Medicare patients - but doesn't address Medicare's flawed process for setting the prices of medical services.
Understand: Medicare's formula has been dictating such cuts in doctors' fees for some years. Congress keeps finding temporary ways to avoid them - so that, by the time that funding runs out, the formula is dictating further slashing. Thus, despite Congress' "fix" for the current 10.6 percent cut, doctors will face another round of slashes in just a few years.
Few lawmakers have the stamina to address Medicare's flawed policies. And fewer vested interests - the AMA included - want to reopen settled rules.
The formula was born in a bargain doctors and the AMA struck with Medicare years ago, limiting how much the total reimbursement to doctors for Medicare services can grow each year. In exchange, doctors got de facto control (via the AMA) of the coding process that lists every treatment Medicare will pay them for.
Under this physician-fee schedule, spending is supposed to remain "budget neutral": If Medicare adds a new service it will cover, or raises what it pays for an existing service, another service must somehow be cut.
Control of the coding process has become a lucrative side business for the AMA, via its sales of code books and other related material. Plus, yearly negotiations on changing the fee schedule have given the AMA a permanent role in Washington.
