US Senate targets Medicare action for December

Analysts at broker Lehman Brothers say they understand the US Senate Finance Committee is targeting December 5 action on a Medicare doctor fix, suggesting key negotiations throughout next week, and a bill agreed upon by December 3 or 4.

They were told there is as yet no agreement on a one- or two-year fix, at a range of $15.0-$30.0 billion. The markup date was set to force a compromise before that time. They think the delay in moving forward supports the idea of a compromise one-year fix, but believe that Senate Finance Democrats are pushing for two years.

They said in a note to clients: "we'd also note that if the timeframe on a Senate bill slips, the few weeks left in this Congressional session suggest the possibility of delay into early 2008 on a retroactive fix. Any delay in moving in the Senate Finance Committee would increase that likelihood, which could create uncertainty around IRFs, LTCHs, dialysis, managed care, and oxygen sectors. We continue to believe that the Senate is considering a two-year IRF 75% rule freeze as an alternative to a permanent fix and note that support for a dialysis MSP expansion in the Senate appears to be wavering (even as support for a rate increase and bundling appears to remain strong).