Panel Approves $11.8 Billion in Medicare Cuts

The Senate Finance Committee Tuesday approved $11.8 billion in Medicare spending cuts over the next three years aimed mostly at hospitals and doctors who treat elderly patients under the program.

The Medicare cuts were part of about $21 billion in spending reductions approved by the panel, including an $8.4-billion cut that came from scrapping federal revenue sharing with local governments in 1986 instead of 1987. In its budget, Congress originally agreed to phase out the program and end it in 1987, but the budget is non-binding.

The bill, similar to one written by the House Ways and Means Committee, would impose moderate increases in premiums that Medicare recipients pay for Part B insurance--coverage of doctors’ fees.

Under the provision, the present $15.50-a-month premium would rise to $16.20 next year, $18.60 in 1987 and $20.80 in 1988. The Reagan Administration wants to raise the premium to $25.30 by 1988.

The Medicare cuts, also called for in the budget, include limiting payments to hospitals to a 0.5% increase in fiscal 1986, a saving of nearly $6 billion over three years.

The Ways and Means Committee bill would allow hospital payments to rise by 1%. Current law calls for a 5% increase.

The Finance Committee also approved freezing payments to doctors who refuse to accept the fee Medicare pays for the entire cost of a service. Many doctors charge elderly patients more than the amount reimbursed by Medicare.