The House corrected some of the problems with the Medicare physician fee
formula when it passed its Medicare reform bill at the end of June. That bill
also inaugurates a Medicare outpatient drug benefit for seniors.
The House bill, written by the majority GOP, differs considerably from the
Medicare bill backed by many of the majority Senate Democrats. However, there is
a bipartisan Senate bill, ostensibly supported by Sen. Max Baucus (D-Mont),
Finance Committee chairman, that closely resembles the House GOP bill. The House
passed its bill by a vote of 221 to 208. The cost of the House bill is
$350 billion over 10 years, of which $30 billion is restoration of payments
to physicians, hospitals, and other health-care providers.
"This bill would avert a series of projected Medicare cuts of nearly
15%," says Timothy T. Flaherty, MD, chair of the American Medical
Association. "Instead, Medicare payments to physicians, nurses, and other
health professionals would increase by about 6% over 5 years. This would result
in a 2005 payment rate that is 20% higher than if Congress failed to act."