Cutting medicare costs: House split over restricting doctors' fees

This week Congress previews an issue sure eventually to become more contentious - medicare. As part of the budget process, the House of Representatives will consider a restriction on doctors' fees that would pare some $900 million off medicare's costs by 1986. With the system's main trust fund expected to go broke before the end of the decade, it's inevitable that medicare cost containment will get much more attention in coming years.

But as the debate over this initial step shows, medicare's problems were not caused by clear villains and do not lend themselves to easy answers.

''Actually, it's very statesmanlike for Congress to take on (the fee restriction) at this time,'' says Henry Aaron, a Brookings Institution scholar and former assistant secretary of Health, Education, and Welfare.

The 1984 budget resolution passed earlier this year promised that Congress would cut medicare spending $1.7 billion over the next three years. Last week the House Ways and Means Committee put together a package of cuts designed to meet that promise.

About half the cuts are relatively technical changes. But $920 million would be saved by freezing the fees doctors can charge for in-hospital treatment of medicare patients.

Currently, if doctors don't think medicare pays them enough for such care, they can simply charge the patient extra. To ensure the payment ''freeze'' would be effective, the Ways and Means Committee recommends this practice be prohibited.

Not surprisingly, doctors vehemently oppose the move. It isn't the freeze they mind, actually. It's being forced to take only what medicare will pay for their services - a move they feel will cut deeply into their incomes long after the freeze has thawed.

''Medicare has traditionally never caught up with the costs charged other patients,'' says William Small, an American Medical Association spokesman.

Indeed, for whatever reason, 53 percent of doctors participating in medicare bill the patient, instead of just accepting what the government will pay.

The doctors' argument has already had some effect.

Instead of sending the fee restriction to the floor as part of the larger package, the Ways and Means Committee last Wednesday voted to pack it off all by itself. That means the whole House of Representatives must go on record as for or against the change - a move that lessens its chance of passage.

It isn't that they're concerned about doctors' income levels, say members of Congress opposed to the restriction. They're worried that more doctors will simply pull out of the medicare program, narrowing patients' range of choice.

''Thirty percent of doctors now do not take medicare patients under any conditions,'' says Rep. Henson Moore (R) of Louisiana, a member of the Ways and Means health subcommittee. ''Will that percentage increase (if the restriction passes)? I tend to think it will.''

Sources who favor the move say Congress must begin cutting medicare sometime, and that everyone involved - including doctors - will have to accept changes they don't like.

But in this case the real problem, claims Representative Moore, is how to reform medicare payments to doctors without causing the doctors to flee from the system. One way, he suggests, might be to combine payment changes with protection for physicians from malpractice suits brought by medicare patients.

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