Bush Vetoes Bill Aimed at Protecting Doctors From Medicare Pay Cut

WASHINGTON – President Bush on Tuesday vetoed a bill designed to protect doctors from a 10.6 percent cut in their reimbursement rates when treating Medicare patients.

The White House supports rescinding the pay cut, but objects to the way the legislation would finance the plan, largely by reducing spending on private health plans. Both chambers of Congress are expected to move quickly to try to override the veto, beginning with the House.

"I support the primary objective of this legislation, to forestall reductions in physician payments," Bush said in a statement. "Yet taking choices away from seniors to pay physicians is wrong."

Lawmakers are under pressure from doctors and the elderly patients they serve to void the rate cut, which kicked in on July 1. The cut is based on a formula that establishes lower reimbursement rates when Medicare spending levels exceed established targets.

Instead of a cut, the legislation would freeze rates for 2008 and would increase them by 1.1 percent in 2009. The legislation generates the revenue necessary to pay doctors more by reducing spending on private health insurance plans. Those plans serve more than 9 million people through the Medicare Advantage program.

Insurers and the Bush administration argued that the changes lawmakers sought will lead to benefit cuts and to fewer Medicare Advantage plans. The Congressional Budget Office estimated that over the course of five years, enrollment in Medicare Advantage will grow to 12 million rather than to 14.3 million.

However, Democratic lawmakers and some Republicans believe that the government's payments to the plans are too generous and that those payments drive up costs for the taxpayer as well as all 44 million participants in the program.

While the focus on the bill has largely been on changes for doctors and private insurers, virtually every type of health care provider as well as millions of patients have a stake in the legislation.

For consumers, lawmakers lowered the copayments for mental health treatment and allowed more people to qualify for the government's help in paying their monthly premiums.

For providers, such as pharmacist, the legislation ensured that they're paid promptly by Medicare drug plans and delayed changes that would have cut their reimbursements when dispensing generic drugs for Medicaid patients.