Politics & Government

State gets Medicare rate promise

WASHINGTON - The health care bill approved Sunday by the House of Representatives lays the groundwork to overhaul a Medicare reimbursement formula that has punished Washington state.

The bill also provides $800 million over two years to doctors and hospitals in Washington and other states until changes are made.

Rewriting the formula has been a top priority of the Washington congressional delegation, but in the end the effort was stymied by complicated budget rules. Instead, the delegation got a firm commitment from the White House that it will study the issue and implement changes within two years. To cushion the delay, the health care bill includes the $800 million, which lawmakers say doctors and hospitals throughout the state should benefit from.

Lawmakers were satisfied with the end result.

“This is one of the most significant parts of the legislation,” said Rep. Norm Dicks, D-Belfair.

As the bill moved to the House floor, two Democratic members from Washington state – Adam Smith and Brian Baird – said they would support the legislation. The two had been undecided.

“The legislation before us is not perfect, but it does make substantial improvements over what we have today,” Baird said, adding that the status quo was “unsustainable.”

The Medicare reimbursement rates for doctors and hospitals in Washington state have been among the lowest in the nation. The formulas discriminate against states such as Washington, whose health care delivery systems are high-quality and low-cost, and is slanted toward states where doctors and hospitals are inefficient and quick to prescribe additional tests and procedures.

The changes envisioned in the bill should make it easier for the 780,000 Medicare patients in Washington state to find and keep doctors and should help attract new doctors to the state who may have gone elsewhere because they could make more money.

Because of the low payments, nearly 30 percent of the doctors in Washington state aren’t taking new Medicare patients or are dropping the ones they have, according to a survey taken by the Washington State Medical Association. The study also found that unless changes were made, more than half the doctors planned to stop handling Medicare cases.

“It’s been a long struggle,” said Rep. Jay Inslee, D-Bainbridge Island, who along with Dicks was instrumental in negotiating the language in the health bill with House Democratic leaders and the White House. “It’s not exactly what we wanted. But we have nailed this down as best we can.”

The agreement on the reimbursement formulas came at 3 a.m. Saturday and helped cement support for the health care bill from lawmakers representing states with low reimbursement rates.

Among those involved were House Speaker Nancy Pelosi; Nancy-Ann DeParle, the White House point person on health care reform; and Secretary of Health and Human Services Kathleen Sebelius.

Hours after the agreement was reached, Sebelius sent a letter to the lawmakers formalizing the administration’s commitment, and President Barack Obama spoke of the agreement while addressing the House Democratic Caucus on Saturday.

In her statement, Sebelius said, “I understand that the current geographic variation in the Medicare reimbursement rate is inequitable, and I will right these inequities to the extent allowable in law.”

Sebelius said the Institute of Medicine will study the issue and make recommendations that she will implement by Dec. 31, 2012.

“Having the administration support, this is critical,” Dicks said.

Inslee said he received a phone call from Obama, who indicated he was “110 percent” behind changing the formula.

“He is personally committed,” Inslee said. “It’s very important. It’s the first time the administration said that.”

The flap over the Medicare reimbursement formula pitted lawmakers from such states as Washington, Oregon and Minnesota against those from New York, Massachusetts and Louisiana.

The average yearly cost for a Medicare patient in Washington state was $7,100, roughly $1,200 less than the national average, according to a 2006 study by the Dartmouth Health Atlas, which tracks Medicare spending. The 2006 numbers were the latest available.

Thirty-four states have higher per-person Medicare costs than Washington state. New York was the highest at more than $9,560.

Inslee said the $800 million in the bill was a “short-term fix” for doctors and hospitals until the formula is changed.

“It’s a bridge to cushion us until it is resolved,” Inslee said.

Inslee said the language should survive any parliamentary challenge in the Senate.

“All systems are go,” he said.

Medicare accounts for 1 in every 5 dollars spent on health care in the United States, and lawmakers believe that making it more efficient could affect costs throughout the system.

“We have to do this if we want to control costs,” Dicks said.

Les Blumenthal: 202-383-0008