To express the sense of the Senate regarding payment reductions under the Medicare physician fee schedule.

1. Adds SEC. __. SENSE OF THE SENATE ON PAYMENT REDUCTIONS UNDER MEDICARE PHYSICIAN FEE SCHEDULE at the end of title VI

   Adds a section

   In S. 1 · Reported to Senate

   Section 13031(j)(3) of the Consolidated Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)) is amended by striking "September 30, 2003" and inserting "September 30, 2013". Amend the title so as to read: "A bill to amend title XVIII of the Social Security Act to provide for a voluntary prescription drug benefit under the medicare program and to strengthen and improve the medicare program, and for other purposes.".

   Inserted: SEC. __. SENSE OF THE SENATE ON PAYMENT REDUCTIONS UNDER MEDICARE PHYSICIAN FEE SCHEDULE.

   Inserted: (a) Findings.--Congress finds that--

   Inserted: (1) the fees Medicare pays physicians were reduced by 5.4 percent across-the-board in 2002;

   Inserted: (2) recent action by Congress narrowly averted another across-the-board reduction of 4.4 percent for 2003;

   Inserted: (3) based on current projections, the Centers for Medicare & Medicaid Services (CMS) estimates that, absent legislative or administrative action, fees will be reduced across-the-board once again in 2004 by 4.2 percent;

   Inserted: (4) the prospect of continued payment reductions under the Medicare physician fee schedule for the foreseeable future threatens to destabilize an important element of the program, namely physician participation and willingness to accept Medicare patients;

   Inserted: (5) the primary source of this instability is the sustainable growth rate (SGR), a system of annual spending targets for physicians' services under Medicare;

   Inserted: (6) the SGR system has a number of defects that result in unrealistically low spending targets, such as the use of the increase in the gross domestic product (GDP) as a proxy for increases in the volume and intensity of services provided by physicians, no tolerance for variance between growth in Medicare beneficiary health care costs and our Nation's GDP, and a requirement for immediate recoupment of the difference;

   Inserted: (7) both administrative and legislative action are needed to return stability to the physician payment system;

   Inserted: (8) using the discretion given to it by Medicare law, CMS has included expenditures for prescription drugs and biologicals administered incident to physicians' services under the annual spending targets without making appropriate adjustments to the targets to reflect price increases in these drugs and biologicals or the growing reliance on such therapies in the treatment of Medicare patients;

   Inserted: (9) between 1996 and 2002, annual Medicare spending on these drugs grew from $1,800,000,000 to $6,200,000,000, or from $55 per beneficiary to an estimated $187 per beneficiary;

   Inserted: (10) although physicians are responsible for prescribing these drugs and biologicals, neither the price of the drugs and biologicals, nor the standards of care that encourage their use, are within the control of physicians; and

   Show 5 more inserted paragraphsShow less

   Inserted: (11) SGR target adjustments have not been made for cost increases due to new coverage decisions and new rules and regulations.

   Inserted: (b) Sense of the Senate.--It is the sense of the Senate that--

   Inserted: (1) the Center for Medicare & Medicaid Services (CMS) should use its discretion to exclude drugs and biologicals administered incident to physician services from the sustainable growth rate (SGR) system;

   Inserted: (2) CMS should use its discretion to make SGR target adjustments for new coverage decisions and new rules and regulations; and

   Inserted: (3) in order to provide ample time for Congress to consider more fundamental changes to the SGR system, the conferees on the Prescription Drug and Medicare Improvement Act of 2003 should include in the conference agreement a provision to establish a minimum percentage update in physician fees for the next 2 years and should consider adding provisions that would mitigate the swings in payment, such as establishing multi-year adjustments to recoup the variance and creating "tolerance" corridors for variations around the update target trend.

   Original wording

   At the end of title VI, insert the following:

Read automatically from the Congressional Record. Check the original before relying on it.

As printed