Obama wants board to set Medicare rates

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By Jennifer Haberkorn

Capping a week of successes and setbacks in his push for expanded health care, President Obama on Friday called for giving more power to an independent board to set Medicare rates, saying it would free up money that could pay for his broader health care plans.

Mr. Obama sought to rally Democrats driving the reform just a day after a stinging evaluation from Congress' scorekeeper, the Congressional Budget Office, whose director said the bills making their way through Congress would drive up government spending and wouldn't curtail skyrocketing costs to consumers.

"I realize that there's going to be lots of debate and disagreement," said Mr. Obama, who scheduled a prime-time press conference for Wednesday. "Now is not the time to slow down."

His plan to change the way Medicare reimbursement rates are set puts him on a collision course with Congress, which has had final say over the rates and has been reluctant to give up that role.

The board recommends how Congress sets Medicare rates for doctors, hospitals and other providers. But powerful lawmakers regularly increase the rates, ensuring more money from the federal program goes to their districts.

On Capitol Hill, two House committees working on Democrats' health care reform bill approved the legislation after marathon debates. A third committee, Energy and Commerce, is expected to finish its debate by Wednesday, but there are still major hurdles to passage there.

House leaders praised the quick progress by the Ways and Means and Education and Labor committees.

"It's pretty exciting; it's transformational; it will make a difference," said House Speaker Nancy Pelosi.

All Republicans in the two committees voted down the bill and were joined by a handful of Democrats - mostly members of the fiscally conservative Blue Dog coalition.

Despite the success, Mr. Obama's deadline to Congress to pass a bill by the August recess is now in serious doubt. One Senate panel, the Finance Committee, ended the week without a plan. Other moderate senators sent a letter to Senate leaders saying they need more time.

And for the first time, Mrs. Pelosi stepped back from her deadline of the August recess, suggesting that the House could wait to see how the Senate proceeds.

Next week, all eyes will be on the House Energy and Commerce Committee and the Senate Finance Committee. On the House side, Blue Dog Democrats are threatening to hold up the bill in committee until the legislation is changed to control costs and offer protections to small businesses and rural areas.

Finance Committee Chairman Max Baucus, Montana Democrat, is trying to negotiate a plan between a bipartisan group of senators on his committee.

Republican support will be critical in the Senate. While the Democrats have 60 members, two of them - Sens. Edward M. Kennedy of Massachusetts and Robert C. Byrd of West Virginia - have been sick and may not be able to vote.

At the White House, Mr. Obama proposed the Medicare changes in an attempt to close a $320 billion funding gap that has stalled the finance committee talks.

"Make no mistake, if we step back from this challenge at this moment, we are consigning our children to skyrocketing premiums and crushing deficits," Mr. Obama said.

Currently, Congress takes recommendations from the Medicare Payment Advisory Commission and typically increases the rates, often citing market factors and cost-of-living variables. Mr. Obama said Medicare would save money if it could implement the rates directly. The president has said in the past that he wants to cut Medicare and Medicaid rates to pay for health care reform.