Endocrine Insider
December 13, 2007

Appropriations
As the federal government has been operating under a continuing resolution (CR), the House of Representatives has been trying to devise an omnibus spending package that might withstand a presidential veto. The spending packages sent to the president thus far have exceeded his requested budget, and he has vetoed all but one. Earlier plans by House leadership to generate a measure that would split the difference between the Congress-passed amounts and the president’s requests have been met with promises of further veto. The House is now considering developing an omnibus package that would match the president’s budget request but also provide additional emergency funds. It is unclear how the National Institutes of Health would fare in such a measure.

As the expiration date of December 14 loomed for the current CR, the House passed a new CR on Thursday, December 13, that would fund the federal government for one more week. Such a move provides more time for the House and Senate to agree upon a new spending package to be sent to the president.

Medicare Physician Payments
Senate Finance Committee Chairman Max Baucus (D-MT) had planned to bring a bill eliminating the 10.1% physician payment cut—scheduled to go into effect January 1, 2008—before the Finance Committee this week for markup and approval. However, the committee did not officially discuss the measure due to ongoing disagreement on how best to “fix” the physician payment problem. Instead, Senator Baucus has begun negotiations with the House to come up with a payment fix agreeable to both chambers, potentially sidestepping the Senate Finance Committee entirely and placing the bill language into an omnibus bill.

Disagreement among members of Congress on how to pay for the elimination of the payment cut is ongoing. Some members support only a 1-yr fix to the physician payment cut by freezing payments and ultimately pushing the cuts back to future years, in the hope that Congress will determine a way to fix the underlying payment formula that is causing the cuts in the first place. Other members would like a 2-year fix to the payment cuts and would pay for it by reducing payments to Medicare Advantage (MA) plans. In general, MA plans are paid a higher rate by the Medicare program than traditional fee-for-service plans, and reducing payments to MA plans by bringing them in line with fee-for-service payments would pay for much of the physician payment cut. However, the President has announced that he would veto any physician payment fix bill that includes reduced payments to MA plans. It is unclear how much support a proposal like this has with members of Congress and whether that support could override a presidential veto.

FY 2008 appropriations and the future of the Medicare physician payment cuts continue to be very fluid, with changes occurring almost daily. Endocrine Insider will provide up-to-date information in its first issue of the new year.