September 29. This evening in the Senate Finance Committee, Senator Jon Kyl (R-AZ) offered his amendment to strike from the health care restructuring bill a provision imposing a 5 % penalty on one in ten Medicare physicians yearly, those whose costs per senior citizen wind up in the top 10%. However, he agreed temporarily to withdraw it at the request of Senator Kent Conrad (D - ND), who spoke out strongly against the penalty provision but sought modifications in the offset originally proposed by Senator Kyl. The temporary withdrawal raises the prospect that an agreed method might be worked out to strike the penalty provision.
The National Right to Life Committee strongly supports the Kyl Amendment and opposes the penalty provision. Senator Kyl quoted Executive Director David N. O'Steen, Ph.D., "This provision creates a cruel death spiral. By financially penalizing Medicare providers, the Baucus bill sets up the cruelest and most effective way to ensure that doctors are forced to ration care for their senior citizen patients. Instead of bureaucrats directly specifying the treatment denials that will mean death and poorer health care for older people, it compels individual doctors to do the dirty work."
Under the bill as it stands, any physician treating Medicare patients who ordered treatments and tests whose cost turned out to be in the highest ten percent per capita would have to pay back to the federal government five percent of all the Medicare reimbursements the physician had received for that year. Senator Kyl warned this would force a "race to the bottom." He said, "If we’re focused on evidence-based criteria, how can we in good conscience simply take an arbitrary number? Ten percent will take a hit regardless of results." He warned that it would create a "conflict of interest" for doctors who would be deterred from ordering what is in the best interests of their patients for fear that they might end up among the 10% of doctors who would face a hefty financial penalty each year. Kyl noted that the Alliance of Specialty Medicine, a coalition of 11 medical organizations representing 200,000 doctors, has endorsed his amendment.
Senator Conrad remarked, "As I try to think about putting … my feet in the shoes, of a doctor who might be treating Medicare patients facing this construct, it is one thing to have the feedback, I think we should absolutely… I think we should do that. But I think this putting in a penalty, that really leaves me cold. I don’t know how you separate out overutilization that is really overutilization from those doctors who may have a group of patients who require more treatment than another group of patients and when you’re put in the position of, there is no way of knowing as you go through the year what is going to happen at the end of the year. And so what do any doctor who wants to avoid being in this penalty box have to do? …I think this is one part of this that I think we should think long and hard about. There is no way of knowing when you go through the year, what you are going to do at the end of the year. . . . I think this is something we would get down the road and we’d regret."
Committee Chairman Senator Max Baucus (D-MT), although he emphasized what he saw as the need to reduce "overutilization," said, "Maybe Senator Kyl has a point here" and offered to "see what modification we can make to address his concern."
Under the rules regulating amendments in the committee, any amendment that strikes a provision "scored" by the Congressional Budget Office (CBO) as cutting costs must include a measure that cuts the same amount in some other way. The CBO scored the penalty provision as cutting Medicare by $ 1 billion over ten years, and as proffered Senator Kyl’s amendment offset that by taking a corresponding amount from funding for the cooperative plans designed by Senator Conrad, and included in the bill proposed by Chairman Baucus, as a replacement for the much-debated "public plan."
Whether the Kyl Amendment to strike the "death spiral" provision, with a different offset, will be brought back with broad support, or whether it will face a closely divided vote, the next day or so is likely to show. Chairman Baucus has expressed his hope that the Senate Finance Committee will complete its consideration of amendments and take a final vote on approving the bill as amended by the end of the week.