Some states see benefit from changes in Medicare formula

WASHINGTON -- A health care bill taken up Tuesday by the Senate Finance Committee overhauls a Medicare reimbursement rate formula for doctors and hospitals that has long penalized Washington and other states with efficient health care systems, said Sen. Maria Cantwell, D-Wash.

Cantwell, a member of the committee, and other Washington lawmakers have considered a change in the formula an essential part of any reform bill. The current formula rewards doctors for the quantity of patients they see and the number of procedures they order, rather than the quality of health care they deliver.

The changes could save Medicare nearly $100 million a year, according to some estimates, and could help lower private health insurance premiums. One of every five dollars spent on health care comes through the Medicare system, Cantwell said.

Without the changes, she said, Medicare could be broke in 10 years.

"If this was a restaurant, your waiter would be bringing everything to your table, whether you ordered it or not or whether you could consume it or not," Cantwell said. "If this were the legislative process, we'd be getting paid for how many bills we passed, instead of whether they were really necessary."

The change in the Medicare reimbursement formula was included in a revised bill that Sen. Max Baucus, D-Mont., the chairman of the committee, unveiled Tuesday. Though four other bills are floating around Capitol Hill, the Baucus bill is widely seen as the vehicle for health care reform. Though Baucus spent months trying to find bipartisan support, no Republicans have endorsed the bill.

More than 500 amendments to the bill were introduced in committee, which hopes to finish work on the measure by Friday. Health care reform legislation could be on the Senate floor as early as next week.

Cantwell said there have been some "pretty wild negotiations" with Baucus dating back to February over the overhaul of the reimbursement formula, but it only became clear Monday that he would include it in the bill.

House Democratic leaders have agreed to study the issue, but Cantwell said that wasn't good enough.

"We are beyond studying it," she said. "We already know the facts. If we don't reform the way Medicare pays for health services, we will break the system."

Because of the low reimbursement rates in Washington state, a growing number of doctors refuse to accept additional Medicare patients. The state has problems attracting new doctors, particularly in rural areas.

The reimbursement rates in some states with less efficient health care systems are nearly double what they are in Washington.

Cantwell, in her opening statement as the committee took up the bill, said that although providing health care coverage for the 47 million people currently uninsured was an important question, the harder question was how to hold down premiums for those with insurance. Their premiums have more than doubled in 10 years.

In addition to changing the Medicare formula, Cantwell has said she won't support a bill that doesn't include a "public option" that provides a government insurance plan for those who can't afford a private one.

The Baucus bill does not currently include such a government option.

But Cantwell said she has introduced an amendment that would provide a basic health plan similar to the one in Washington state. The senator said the federal government would run the plan, but states would have to opt into it in order for their residents to be eligible.

Cantwell said the plan would cover about 75 percent of the uninsured. Those eligible could be living at 200 percent above the poverty line, or an income of about $44,000 for a family of four.

"It's gaining a lot of traction," she said.