Obama: Congress should let panel set Medicare payments

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WASHINGTON - In the struggle over legislation to overhaul the health system, President Barack Obama is asking Congress to do something it has rarely done - voluntarily give up some of its power.

While trying to expand health care coverage but curtail costs, Obama is urging lawmakers to largely turn over their hands-on role in setting Medicare payment policy to a panel of experts.

Though overshadowed by arguments over the government option of health insurance, an independent panel could help Obama wring out of Medicare the hundreds of billions of dollars in waste and savings that he says will pay for most of the $900-billion cost of the overhaul.


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"It could be huge," said economist Len Nichols of the nonpartisan New American Foundation, who supports the idea.

Yet many lawmakers on both sides of the aisle in Congress take a dim view of ceding their power to set reimbursement rates for suppliers and care providers.

They say they have a better grasp of their districts' and states' needs. But Larry McNeely, of the liberal activist group U.S. PIRG, charges that Congress plays "pork-barrel politics with Medicare."

Currently, Congress decides what Medicare will pay doctors, hospitals and other providers, and then puts it in legislation.

To secure advice on the often complex pay policy, Congress in 1997 created a Medicare Payment Advisory Commission, or MedPAC, staffed with experts.

Still, the process attracts well-financed lobbying and campaign donations by the health industry and local interests. And lawmakers often ignore MedPAC's advice.

"The record is pretty clear that the effectiveness on lobbying of individual members to overturn evidence-based decision-making is pretty overwhelming," Nichols said.

A recent inspector general report, for example, said Medicare pays four times as much for motorized wheelchairs as suppliers pay because Congress in 2003 suspended the MedPAC-recommended competitive bidding among suppliers that would have lowered the cost. Congress acted after lobbying by suppliers concerned that they would lose out.

Even when lawmakers propose Medicare pay hikes based on studies, they get tangled up in Washington's world of lobbying and campaign funds.

The American Ambulance Association, for example, has depended on many champions in Congress over the years. When Republicans ruled Congress it turned to Sen. Trent Lott (R-Miss.), said its lobbyist, Tristan North. Now that Democrats are in charge, it relies on Sen. Charles Schumer (D-N.Y.).

After a GAO report found Medicare fell about 6 percent short in covering ambulance costs, and an upstate New York ambulance owner complained, Schumer acted.

Last year he passed a bill raising ambulance reimbursements by $170 million over two years and in May he proposed a permanent 6 percent hike, worth $310 million in its first year alone.

The ambulance trade group was grateful. As it did with Lott, it named Schumer its legislator of the year, and earlier this year its members gave $37,300 to his campaign fund.

To insulate policy from lobbyists, the health care overhaul bill proposed Wednesday by Senate Finance Committee Chairman Max Baucus (D-Mont.) includes a version of Obama's expert panel called the Medicare Commission.

The commission would do much of the work Congress now does in figuring out both the best way and how much Medicare should pay providers, and would limit Congress' role.

It would send proposals to Congress to reduce Medicare spending by targeted amounts if its costs rose faster than the Consumer Price Index. Congress could then approve the commission proposals, amend them or develop their own as long as they remained under the spending targets.

But Congress' approval of a Medicare Commission could be a long shot.

The House excluded similar panels in its three health bills. So did the other Senate bill.

The Congressional Budget Office said a House version of the panel would save just $2 billion, if that, in its first five years because of other Medicare savings in the legislation.

Most House members from New York oppose the idea.

Rep. Steve Israel (D-Huntington) said, "I do not want to surrender my authority, based on the understanding I have in my district, to somebody who sits in an office in Washington with a calculator."

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