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Plan to Change Medicare Pay to MDs Revived

TIMES STAFF WRITER

Congressional negotiators, closing in on agreement over a $14-billion deficit-reduction package, unexpectedly revived a plan that would make sweeping changes in the way Medicare pays doctors.

General practitioners and internists would gain at the expense of surgeons and other specialists such as eye doctors and urologists. Using a newly developed “relative value scale,” the new approach would reward less specialized doctors who spend more time with patients.

Meantime, the House and Senate remained deadlocked Monday night over the fate of Medicare’s controversial catastrophic care program, the other major issue that Congress intends to resolve before it recesses.

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The negotiators gave their approval to the deficit reduction plan early today and sent it to the House and Senate, where it is expected to be voted on later in the day.

The doctor payment plan is designed to hold down Medicare’s overall spending for doctors’ expenses by setting annual targets. It would limit the growth in government medical payments to physicians in a fashion similar to the current restraints on hospital payments.

If enacted, the reshuffling of Medicare’s annual $31 billion in payments to doctors would probably be copied by private medical insurers.

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Both parties predicted the measure would be quickly approved by Congress and signed by President Bush.

Senate Republican leader Bob Dole of Kansas said he had been told by Treasury Secretary Nicholas F. Brady and Budget Director Richard G. Darman “the White House will support this package.”

Earlier this month, House and Senate negotiators apparently had abandoned the medical payment reform scheme, which had been included in the deficit-reduction bill approved by the House but had not been in the Senate version.

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But Sen. John D. (Jay) Rockefeller IV (D-W.Va.) and other lawmakers involved in health issues engineered an eleventh-hour agreement to bring the scheme back to life before Congress recesses for the holidays.

Congress is trying to mitigate the effect of $16.1 billion in nearly across-the-board spending cuts imposed last month under the Gramm-Rudman deficit reduction law. President Bush has threatened to leave the automatic spending cuts in place unless lawmakers produce a bill that saves at least $14 billion for the fiscal year that began Oct. 1.

The deficit-reduction bill approved by negotiators early today is designed to raise about $5.3 billion in revenues from a variety of sources that President Bush does not consider tax increases.

It would also shave spending by about $4 billion in such areas as Medicare and farm supports, lawmakers said. The rest of the deficit reduction would come from leaving roughly $4.3 billion of the across-the-board cuts in place.

Another $3 billion in savings would be achieved this year through a variety of one-time budgetary gimmicks that Administration officials now refuse to count as real cuts.

Restoring the Medicare overhaul to the deficit reduction bill represents a partial defeat for the powerful American Medical Assn., which originally had endorsed the idea of reshuffling payments but vigorously fought any effort to set overall limits on Medicare payments to doctors. It is an even bigger blow to the 50,000 specialists represented by the American College of Surgeons.

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According to lawmakers, the plan agreed upon by congressional negotiators represents a compromise between the positions originally taken by the Senate and by the House Ways and Means Committee. The Ways and Means approach was much tougher on doctors than the Senate approach, which was endorsed by Rep. Henry A. Waxman (D-Los Angeles), chairman of the House health and environment subcommittee of the Energy and Commerce Committee.

The compromise plan also does not give the Health and Human Services Department as much control over determining expenditure targets as the Bush Administration had sought.

Although the Medicare overhaul is not designed to achieve spending reductions in its first year or two of operation, lawmakers are counting on it to help rein in Medicare’s runaway costs in future years.

The government is expected to spend nearly $95 billion on Medicare during fiscal 1990, almost triple the $33 billion spent in 1980. Unless costs are held down, Medicare spending will outstrip defense and Social Security combined early in the next century.

Medicare is also expected to begin running larger and larger deficits as the 1.45% payroll tax on wages, which is matched by employers, proves unable to keep up with the increase in medical payments to the elderly.

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