WASHINGTON Republican senators blocked legislation Thursday that would trim payments to private health insurers serving people in Medicare and use the savings to raise reimbursement rates for doctors.
Some 600,000 doctors care for Medicare patients. Payments rates are set to drop by 10.6 percent on July 1 as a result of a formula that calls for cuts when spending exceeds established goals.
Senate Democratic leaders tried to advance a bill costing $19.8 billion over five years and paid for mainly by phasing out some payments to insurers. The vote was 54-39, short of the three-fifths majority needed.
Democrats said they were worried about the Senate's ability to pass the legislation before the cut in payments begins.
"Time is running short. We need to complete a bill by June 30," said Sen. Max Baucus, the chairman of the Senate Finance Committee. "The options before us are few and fraught with pitfalls. By far, the best option for getting a Medicare bill done this year is the bill on which we will vote today," said Baucus, D-Mont.
Republicans said the Democrats' bill would have drawn a presidential veto.
"We all know this is merely an exercise, and that Democrats will return to negotiations after the Senate votes down this doomed bill," said Sen. Mitch McConnell, R-Ky. "Let's expedite this process and create a bipartisan compromise before July 1."
The payments targeted for cuts are intended to account for the higher cost of care associated with teaching hospitals. In theory, insurers use the extra payments to pay those hospitals more. Some lawmakers have said the payments are duplicative.
Democrats also sought to force certain insurers to form networks with health care providers in the communities they serve. Such networks help providers coordinate patient care and, in theory, do away with duplicative treatments or conflicting prescriptions.
Both provisions would have saved an estimated $12.5 billion over five years, according to estimates from the Congressional Budget Office.
But the insurance industry said such a network requirement could force some private insurers from certain markets. As a result, older people would have fewer choices for their Medicare benefits.
Republicans also submitted legislation to lower payments to the private plans, but their bill would not require private-fee-for-service plans from forming provider networks. The Bush administration opposed the idea.
"Such policies would risk reducing additional benefits for millions of plan enrollees who have chosen to have their care delivered through this mechanism, including those in rural areas," the administration said in a statement released a few hours before the Senate vote.
The Baucus' bill was about 25 percent more expensive than a proposal from Sen. Charles Grassley, R-Iowa., and went beyond just avoiding a rate cut for doctors. It also enhanced some Medicare benefits by:
• Doing away with the exclusion of barbiturates and bendodiazepines from the Medicare drug benefit. Barbiturates are used to help people sleep; benzodiazepines treat anxiety. Both are highly addictive and the drug benefit will not cover them.
• Lowering the co-payments that Medicare participants pay when they get treatment for depression and other mental health problems. Their payment is currently 50 percent. Other co-payments for physical problems are 20 percent.
• Giving older people an incentive to visit a doctor during their entry into Medicare by waiving the deductible.
• Cut payments to oxygen providers and suppliers of power wheelchairs.
Nine Republicans voted to consider the bill Sens. Susan Collins and Olympia Snowe of Maine, Lisa Murkowsi and Ted Stevens of Alaska, Pat Roberts of Kansas, Elizabeth Dole of North Carolina, Gordon Smith of Oregon, Arlen Specter of Pennsylvania and Norm Coleman of Minnesota.
Grassley said the Democrats' effort was a waste of time and money.
"Congress has 18 days left to make sure doctors serving Medicare patients don't get hit with a Draconian cut that would put them in the position of not being able to serve seniors," Grassley said. "I hope that this failed vote will get us to the negotiating table."
The advocacy group AARP had lobbied in support of Baucus' bill and reminded them they would report the results to their members.
"The bill blocked today would have improved the program's low-income, preventive and mental health benefits without drastic increases in Medicare premiums," said the group's chief executive, Bill Novelli.