Some Medicare payments might be frozen

Advisory panel attempts to restrain rising costs


WASHINGTON - To slow the growth of Medicare, an influential federal advisory panel will soon recommend that Congress freeze payments to nursing homes and home care agencies and reduce the cost-of-living allowance that hospitals are scheduled to receive next year.

Republicans in Congress and Bush administration officials welcomed the proposals, saying they would save money for taxpayers and the Medicare trust fund. But health care providers expressed alarm, saying the proposals could reduce access to care for the elderly and disabled.

The panel, the Medicare Payment Advisory Commission, recommended a 2.5 percent increase in Medicare payments to doctors next year. Payments to doctors were cut 5.4 percent last year, and a further cut of 4.4 percent is to take effect March 1.

Doctors are lobbying Congress to block that reduction. The Senate is poised to approve a proposal by Sen. Charles E. Grassley, an Iowa Republican, to keep doctor payments at 2002 levels for the rest of this year. It is unclear whether the proposal, part of an omnibus spending bill, will become law.

In a draft of its annual report, to be sent to Congress in March, the panel said, "Medicare payments for hospital services are at least adequate" to cover the costs of efficient providers. Payments to nursing homes and home health agencies appear "more than adequate" to cover the costs of treating Medicare patients, the panel said.

Medicare payments to home health agencies were cut 4.9 percent Oct. 1, and nursing homes say their payments were reduced an average of 10 percent at that time. Experts on the staff of the commission said that home care agencies and nursing homes had been able to control their costs without reducing the quality of care.

At a meeting two weeks ago, many of the 17 commissioners said Medicare had no obligation to make up for underpayments by other insurers, like Medicaid, the federal-state program for low-income people.

"We should not use Medicare dollars to offset Medicaid losses," said the commission chairman, Glenn M. Hackbarth. He added, "I don't see evidence to support the claim that our recommendations would impede access to quality care."

With growing federal deficits, Republicans want to slow Medicare's growth but face political pressure from two sources: elderly people demanding coverage of prescription drugs, and health care providers seeking higher Medicare payments.

John C. Rother, policy director of AARP, said: "The commission is a highly respected group whose recommendations usually carry great weight in Congress. Its recommendations will help Congress resist the otherwise overwhelming political pressure to raise provider payment rates."

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