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AMA Backs GOP Medicare Plan : Reform: Support comes after House Republican leaders vow to give doctors billions of dollars in relief. Group's endorsement is seen as crucial to gaining public acceptance.

October 11, 1995|ROBERT A. ROSENBLATT and EDWIN CHEN | TIMES STAFF WRITERS

WASHINGTON — The American Medical Assn. gave a vigorous and unexpected boost to prospects for Medicare reform on Tuesday, endorsing the House Republican plan after GOP leaders promised to reduce the financial impact on doctors by billions of dollars.

The AMA will "work very hard to make sure" the nation's doctors are aware of the GOP plan and will "encourage them to inform their patients," AMA President Dr. Lonnie Bristow said at a news conference in the office of House Speaker Newt Gingrich (R-Ga.) Tuesday night.

The AMA's endorsement drew swift criticism from the White House and a key congressional Democrat. But it greatly strengthened the hands of Gingrich and other GOP leaders battling to win approval for their plans to trim $270 billion from Medicare outlays over the next seven years. The opposition of the organization, which represents 300,000 physicians nationwide, to the Clinton Administration's health care reform effort last year was a leading factor in its demise.

Under the agreement with House leaders, AMA general counsel Kirk Johnson said doctors will get billions of dollars in relief, meaning their reimbursements won't be cut as much as called for previously under the plan--$26 billion over seven years. AMA officials expect the final savings will be closer to the Senate figure of about $22 billion.

The plan already had other elements the AMA embraced, including limits on medical malpractice suits and permission for doctors to form their own health care networks and charge unrestricted fees.

Gingrich refused to discuss specific figures, saying only that the doctors received a commitment that the reimbursement schedule--the system of payments by Medicare to health care providers--would be "equitable."

A White House official said late Tuesday it is ironic that the AMA endorsement came "the same day that House Republicans defeated the Democratic amendment to ensure balanced billing protection for beneficiaries. . . . "

Balanced billing refers to limits on what doctors can charge beyond the Medicare fee schedule for office visits, examinations and tests and procedures. Doctors cannot charge more than 15% above the Medicare system now. The GOP proposal contains no limits on what doctors can charge when they organize their own health networks, as the Republican plan would permit.

The AMA's support is thought to be crucial to gaining public acceptance of the reforms. For Medicare's 37 million beneficiaries, there is no better source of information on health issues than their doctors, Gingrich said.

"The people my mother trusts in Harrisburg, Pa.," her doctors, will present the information about Medicare reform in a calm way, he said. The physicians will say "here are the facts, we don't need any propaganda," Gingrich said, asserting that the backing of doctors will offset any Democratic attacks on the plan.

The House plan already had advantages for doctors that exceeded those in the Senate version. The House legislation called for changes in the antitrust laws to permit doctors and hospitals to work together to create health care networks. They could fashion health maintenance organizations and other networks, bypassing the insurance companies or other corporate enterprises that operate most managed care systems.

And the House GOP leaders' bill also included a cap of $250,000 for pain and suffering awards--payments for non-economic damages--in medical malpractice cases. Punitive damages would be limited to $250,000, or three times the amount of the economic loss, whichever is larger. The Senate bill, by contrast, did not deal with malpractice changes.

AMA officials have met more than six times with Republican leaders to discuss the emerging legislation.

The deciding factor in the endorsement was the promise that the doctors won't be hit as hard in the pocketbook as originally proposed in the Medicare reform effort.

The leading goal for the GOP is $270 billion to be saved by slowing the growth of Medicare outlays from the current level of 10% a year to a rate of 6.5% annually. Most savings are to come from reductions in the rates of payment to hospitals, doctors, laboratories, home health agencies and other health care providers. If the doctors' cutbacks are $3 billion or $4 billion less, the money must come from somewhere else.

A top Gingrich aide insisted it would not come from hospitals or from the 37 million Medicare beneficiaries, but didn't indicate what would provide the additional savings. The GOP plan already anticipates large-scale savings as millions of people move from the traditional fee-for-service system into HMOs and other health care networks. The Republicans might increase their optimistic expectations of money to be saved in this way.

AMA leaders emphasized that the GOP bill would be good for patients by expanding access to a broader range of health care systems. Seniors will get "a wider array of choices," Dr. Daniel Johnson, the AMA president-elect, said at the news conference.

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