July 15 (Bloomberg) -- President George W. Bush vetoed legislation that would block a cut in Medicare fees for doctors.

The measure returned for override votes in the House and Senate, where it originally passed with more than enough support to thwart the veto.

The legislation would avert a 10.6 percent cut in fees paid to doctors by Medicare, the U.S. health program for the elderly and disabled. It would cut reimbursement instead to insurers that provide care through plans called Medicare Advantage. While Democrats say the companies are overpaid, Bush has said cutting their funding would hurt seniors enrolled in the plans.

``I support the primary objective of this legislation, to forestall reductions in physician payments,'' Bush said in a message to Congress. ``Yet taking choices away from seniors to pay physicians is wrong.''

Hours later, the House began debate before a planned override vote, and Senate leaders said they also will act today.

``I think we have enough'' votes, Senate Majority Leader Harry Reid, a Democrat from Nevada, told reporters.

The cut in doctors' fees, which took effect officially on July 1, hasn't yet been implemented. Medicare officials delayed processing bills until at least today to give Congress time to act. The reduction was required under a formula Congress approved a decade ago to hold down Medicare spending,

AARP Comment

Lawmakers should do the ``right thing'' and override the veto, said Nancy LeaMond, executive vice president of AARP, the largest association of Americans ages 50 and older, in an e- mailed statement today. The group will track votes and inform its 39 million members how their representatives voted.

``The president's veto was unfortunate, but Congress still has a chance to make it right,'' LeaMond said.

AARP and the American Medical Association campaigned for the measure.

About one in five of Medicare's 44 million enrollees is signed up for a Medicare Advantage plan. The federal health program is expected to pay $86 billion this year for the plans.

Bush's opposition to the legislation focused on changes that would be required of insurers' private fee-for-service plans, which a congressional advisory board has estimated are paid on average 17 percent more then Medicare spends to provide benefits directly.

The legislation would require this type of Medicare Advantage plan to form provider networks, instead of assuming that all doctors and hospitals that take Medicare are part of the plan. The change would cause some plans to close and beneficiaries to choose other Medicare options, according to a report by the Congressional Budget Office.

Teaching Hospitals

Medicare also would stop paying private plans extra for patients treated at teaching hospitals. These facilities already receive extra payments to cover their higher cost. Overall, the legislation would reduce payments to private plans by about $12.5 billion over five years.

The measure also would suspend Medicare's new bidding process for medical equipment such as wheelchairs and walkers. The new procedure is intended to reduce prices by requiring suppliers to bid instead of being paid according to a fee schedule. Some suppliers who lost the initial bidding, covering 10 metropolitan areas, said they were treated unfairly and that Medicare beneficiaries might not get supplies they needed.

To contact the reporter on this story: Aliza Marcus in Washington at amarcus8@bloomberg.net

Last Updated: July 15, 2008 15:19 EDT