Doctors' Payments Snag Health Bill

By JANET ADAMY WASHINGTON -- A plan to end a program that would cut government payments to doctors is emerging as the flash point in the debate over whether President Barack Obama's effort to overhaul the health system would increase the federal budget deficit. The proposal was crucial to winning support from the politically powerful American Medical Association -- but it has also made it tougher to argue that the health overhaul would pay for itself. President Obama this week plans to continue his bid to drum up support for his goal to expand health insurance to the nation's 46 million uninsured Americans, after suffering some setbacks last week. On Capitol Hill this week, House members hope to pass their health bill through a third and final committee, and senators are expected to resume talks to hammer out an agreement on the only bipartisan health bill taking shape in Congress. Administration officials on Sunday expressed confidence that lawmakers could pass legislation before Congress's August recess. "The chances are high" that Congress can meet the deadline, White House budget director Peter Orszag told "Fox News Sunday," but he added that lawmakers should amend the legislation to help contain costs. Health and Human Services Secretary Kathleen Sebelius, appearing on NBC's "Meet the Press," said costs associated with the legislation could be reduced significantly if lawmakers included the administration's recommendation to bolster the power of the Medicare Payment Advisory Commission, or MedPAC, to set Medicare payment policies. Some of the nation's governors, meeting at the summer convention of the National Governors Association in Biloxi, Miss., over the weekend, expressed concern that federal health-care legislation could push billions of dollars in new expenses onto their state budgets, according to Associated Press. "If we're asked to pick up on state increased costs in health care, it's going to take away from...environment, transportation, education, public safety, all the other things that we as states do," said Georgia Gov. Sonny Perdue, a Republican. New Mexico Gov. Bill Richardson said he liked President Obama's plan to use public and private options for health care, but he worried that Congress would dilute the plan and pass billions of dollars in new expenses on to states. "We can't afford that, and that's not acceptable," he said, according to the AP. One of the president's challenges will be convincing the public that the effort to overhaul health care wouldn't add to the national debt. In its first comprehensive cost estimate of the planned health overhaul, the Congressional Budget Office said in a report Friday that the House health bill would increase the deficit by $239 billion by 2019. The CBO is a nonpartisan body that calculates the cost of legislation, and its findings help shape policy. The White House, which has insisted the health overhaul wouldn't raise the deficit, said the $239 billion figure doesn't tell the whole story. One of the biggest costs of the House bill is a provision that would override a cost-savings measure imposed earlier this decade that calls for the government to cut the payments doctors receive for treating Medicare patients by 21% next year. The House proposal would instead give doctors a slight payment increase, at a total cost of $245 billion over 10 years, compared with cutting payments by 21%. Democrats note that lawmakers have postponed implementing the cuts each year since they were first sought, and that the government wasn't likely to have followed through with this year's reduction. For that reason, they argue, that cost should be viewed as a separate item, and that, when taken out, their plan wouldn't increase the deficit. "It so happens that they attached that to health-care reform," Mr. Orszag said in an interview Sunday. By factoring that cost out of the health overhaul, "we think we're being more real world and realistic." The Congressional Budget Office must stick to a stricter interpretation of the spending provisions in the bill. "This legislation says we're going to raise doctors' payments, and we score that with the cost it's going to have," CBO Director Douglas Elmendorf said in an interview. The possibility of increased payments to doctors is likely to pressure them to swallow some type of cuts to help reduce the cost of the bill. Cecil Wilson, president-elect of the American Medical Association, said in an email that "reforming the flawed Medicare physician-payment system is very important to the final health-reform package, as are covering the uninsured, medical liability reform and many other elements of the bill. AMA's support for a final package will depend on all its components." Other interest groups are speaking up in an effort to shape the bills as they move into a critical stage. America's Health Insurance Plans, the main lobby for the insurance industry, on Monday plans to begin a national advertising campaign voicing support for a bipartisan health plan. —Stephen Power contributed to this article. Write to Janet Adamy at janet.adamy@wsj.com