Ryan Schuster

Jun. 28, 2008 (McClatchy-Tribune Regional News delivered by Newstex) -- North Dakota's congressional delegation reacted with disappointment to the Senate's failure Thursday to take up legislation that would have averted cuts in Medicare reimbursements to health care providers starting Tuesday.

Republican senators blocked attempts by Democrats to vote on the bill. Supporters fell two votes shy of the 60 needed to close debate. The House approved the bill by an overwhelming 355-59 margin earlier this week.

As it stands, Medicare reimbursements to doctors will go down 10.6 percent next week. The bill would have increased reimbursements by 1.1 percent starting in January.

"This is a very important package to North Dakota," Rep. Earl Pomeroy, D-N.D., said Friday during a visit to Altru Health System in Grand Forks. "We need the money to go to patient care, not insurance companies paying Medicare."

The reimbursement cuts would cost Altru nearly $2 million a year, said Dwight Thompson, the group's chief financial officer. If the bill passed, Altru could save almost $3.5 million annually, he said.

If the bill doesn't pass or if it passes later but doesn't retroactively repay providers, Altru would likely end the year in the red, requiring a budget cut in 2009, said the group's chief executive Dave Molmen.

MeritCare Health System officials in Fargo have said low reimbursement rates play a role in their

recent decision to lay off the equivalent of 300 full-time employees.

Molmen said Altru

doesn't have any such plans, and should budget cuts prove necessary, job cuts would be a last resort.

Sen. Byron Dorgan, D-N.D., vowed to help pass the bill after the Senate returns from a Fourth of July break. He predicted Democrats will find the votes to break a Republican filibuster and retroactively refund the reimbursement cut.

"In the meantime, the threat of a substantial cut to physician payments is a real blow to the Medicare program -- especially to rural health care where such a high percentage of the patients have Medicare," Dorgan said.

"What the minority (in the Senate) is effectively doing is putting their stamp of approval on a cut of more than 10 percent in Medicare fees for doctors," Sen. Kent Conrad, D-N.D., said. "That's not good for North Dakota."

North Dakota health care providers said they are squeezed by Medicare reimbursement rates that are well below those of other states, including Minnesota.

"What you see going on with MeritCare is the tip of the iceberg," said Altru President Casey Ryan. "How long can we continue with these low reimbursement rates? If it gets to the point when we start losing physicians (because we can't afford to pay them enough to stay), we won't be able to recover from it."

He thinks MeritCare's belt-tightening is only the "first round" of cost-cutting moves, he said.

Unless the national health care system is reformed in the next three to five years, North Dakota hospitals could be in serious trouble, Ryan warned.

On a brighter note, Thompson said an expected recalculation of the costs associated with administering the sole community hospital program could net Altru an estimated $1 million or more a year starting in January.

Schuster covers business. Reach him at (701) 780-1107; (800) 477-6572, ext. 107; or send e-mail to rschuster@"gfherald.com. Read his business blog at www.areavoices.com/

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