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Health Care

Congress's Medicare Deal Isn't a Deal at All

Democrats and Republicans are touting a permanent “doc fix,” but they’ve yet to reach agreement on the hardest part: how to pay for it.

(Rick Bloom)(Rick Bloom)

photo of Clara Ritger
February 6, 2014

Democrats and Republicans are touting a compromise that would repeal a flawed formula that determines Medicare physician payments, but for now it's a deal in name only.

Lawmakers in both chambers are planning to introduce bipartisan legislation Thursday to repeal Medicare's Sustainable Growth Rate formula, a physician payment plan Congress passed in 1997 in the hopes of limiting spending on the massive social program. Since 2003, however, Congress has passed short-term patches to stop the cuts, a maddening annual tradition known as the "doc fix" that has come at a cost of roughly $150 billion.

In an effort to end the annual exercise, the bills lawmakers are releasing Thursday would repeal the SGR formula and would institute five years of annual updates of 0.5 percent to Medicare physicians' pay.


But despite the bills' bipartisan backing, lawmakers have yet to agree on the thorniest issue of the doc fix: how to pay for it.

Neither bill includes measures to offset the spending—a hole that could sink it among the Hill's budget hawks. And as Congress debates where to cut or where to get new revenue to offset the spending, the deal's bipartisan support could splinter.

The Congressional Budget Office is slated to do a cost estimate of the measures Thursday afternoon, before they are formally unveiled.

If it were to pass, the compromise legislation as currently written would create a program and quality measures to evaluate performance and reward providers who improve health outcomes, and it adds incentives for care coordination for patients with chronic conditions. Additionally, it creates a Physician Compare website that Medicare beneficiaries can use to make decisions about providers, as well as to allow outside reviewers to evaluate quality of care.

This year's round of physician reimbursement cuts is set to take effect in March, unless Congress acts.

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