‘Doc Fix’ Deal Still Has A Long Way To Go

House leaders will try to sell a deal to the their members, but they face roadblocks from industry, conservatives, liberals and the Senate.

National Journal
March 16, 2015, 2:57 p.m.

House Speak­er John Boehner and Minor­ity Lead­er Nancy Pelosi are close to an agree­ment on the sub­stance of a per­man­ent “doc fix”—but they’re still scram­bling to sell the plan to skep­tics in their own caucuses, the health care in­dustry, and the Sen­ate.

The lead­ers are fight­ing in­tense polit­ic­al battles aimed at both keep­ing prom­in­ent groups such as the AARP and Her­it­age Ac­tion on the side­lines while carving out a wide enough middle ground in the House to pass a bill cer­tain to ali­en­ate par­tis­ans on both sides.

“I think it’s go­ing to be a pretty tricky bal­an­cing act,” said Dan Ad­cock, dir­ect­or of gov­ern­ment re­la­tions and policy at the Na­tion­al Com­mit­tee to Pre­serve So­cial Se­cur­ity and Medi­care.

The plan, which Boehner is ex­pec­ted to pitch to his caucus Tues­day, would re­place Medi­care’s pay­ment for­mula for doc­tors, which has be­come a per­en­ni­al—and ex­pens­ive—an­noy­ance for law­makers and doc­tors alike. If they can­not come to an agree­ment by the end of the month, law­makers will need to pass yet an­oth­er short-term patch, at a cost of roughly $20 bil­lion, to pre­vent a cut of more than 20 per­cent in doc­tors’ Medi­care pay­ments.

(RE­LATED: Get Ex­cited, Every­one. It’s “Doc Fix” Time)

Demo­crats have con­sist­ently hammered Re­pub­lic­ans over pro­posed cuts in Medi­care be­ne­fits, but aides are now press­ing groups like Ad­cock’s—as well as AARP, the power­house seni­ors’ lobby—not to op­pose the doc fix deal, even though it in­cludes at least two pro­vi­sions that would pass more health care costs on to seni­ors.

“They want every­body to give this deal a chance. They’re say­ing it’s bet­ter to do this now rather than fight it dur­ing budget re­con­cili­ation. Or if we wait, the cost of the doc fix will be high­er. Those are the kinds of things they’re pitch­ing on,” Ad­cock said. “That is what they’re say­ing: ‘If you can’t sup­port it, don’t op­pose it.’ But their primary mes­sage is that people should with­hold judg­ment un­til they see the fi­nal deal.”

On the right, Boehner and his al­lies are try­ing to quell con­ser­vat­ive mem­bers’ skep­ti­cism. The con­ser­vat­ive ad­vocacy group Her­it­age Ac­tion came out swinging against the doc fix pro­pos­al, angry that Boehner had star­ted off by ne­go­ti­at­ing with Pelosi and frus­trated that the bulk of the pack­age — about $130 bil­lion—would not be paid for un­der the Con­gres­sion­al Budget Of­fice’s nor­mal 10-year win­dow.

Boehner is lean­ing in­stead on strong sup­port from Amer­ic­ans for Tax Re­form, the anti-tax group headed by Grover Nor­quist.

(RE­LATED: Boehner’s New Strategy: En­list Demo­crats First, Not Last)

Ry­an El­lis, ATR’s tax policy dir­ect­or, said CBO is ex­pec­ted to re­lease a let­ter Tues­day cla­ri­fy­ing that, while the doc fix deal might not re­duce the de­fi­cit over the next 10 years, it would lead to con­sid­er­able sav­ings in the long run.

ATR and Her­it­age Ac­tion made their com­pet­ing pitches Monday to a group of con­ser­vat­ive staffers, where El­lis en­cour­aged them not to worry about the 10-year budget win­dow.

“I could care less about the 10 years. It’s en­ti­tle­ment re­form,” El­lis said. “You would nev­er meas­ure en­ti­tle­ment re­form in a 10-year win­dow.”

El­lis said ATR has come to the bill’s de­fense so ag­gress­ively in part be­cause Her­it­age Ac­tion came out so strong with its ar­gu­ment that the bill isn’t paid for. “That’s kind of forced us to push an al­tern­at­ive nar­rat­ive here,” he said.

Aides are mak­ing a sim­il­ar pitch to health care in­dus­tries, ac­cord­ing to lob­by­ists fol­low­ing the is­sue.

On the policy mer­its, the Amer­ic­an Med­ic­al As­so­ci­ation has en­dorsed a per­man­ent doc fix re­peatedly—it’s the group’s biggest pri­or­ity by far, and it’s put­ting to­geth­er a broad co­ali­tion of phys­i­cian groups to sup­port the meas­ure Boehner and Pelosi are craft­ing.

Law­makers might have a harder time with hos­pit­als, which would ab­sorb a sig­ni­fic­ant share of the bill’s pro­vider cuts. A spokes­wo­man for the Amer­ic­an Hos­pit­al As­so­ci­ation de­clined to com­ment on the emer­ging frame­work Monday.

(RE­LATED: How Re­pub­lic­ans Could Blow the Budget)

But cuts to pay for a short-term patch could also come from hos­pit­als, mak­ing it a ques­tion of how much the in­dustry would have to ab­sorb now, versus the costs it would in­cur over time if Con­gress can’t break the pat­tern of short-term doc fixes.

The frame­work es­sen­tially treats the doc fix it­self as the ve­get­ables that Con­gress needs, with sweeten­ers for each side. There’s already a bi­par­tis­an, bicam­er­al agree­ment on the spe­cif­ic plan to re­place Medi­care’s pay­ment for­mula, but pre­vi­ous at­tempts at a per­man­ent fix have broken down over dis­agree­ments about how to off­set the cost.

Un­der the emer­ging Boehner-Pelosi agree­ment, those costs wouldn’t be off­set with­in CBO’s tra­di­tion­al 10-year win­dow, but both parties would swal­low some policies they don’t like in or­der to get the doc fix through.

Re­pub­lic­ans would agree to a two-year CHIP ex­ten­sion at fund­ing levels set in the Af­ford­able Care Act, while Demo­crats would give up two Medi­care be­ne­fit cuts: in­creased cost-shar­ing in parts of the pro­gram, and a policy re­quir­ing sup­ple­ment­al Medigap plans to carry a co-pay.

It’s not clear yet wheth­er Boehner and Pelosi can shep­herd that deal through their cham­ber—one lob­by­ist gave it a 50-50 chance. It would be a big lift in a short time frame, and no one in­volved in the pro­cess seems to have any idea wheth­er the Sen­ate would ac­cept the House deal.

Some Sen­ate Demo­crats have already in­dic­ated that they want a four-year CHIP ex­ten­sion, and the par­tis­an pres­sures at play in the House will play out in the up­per cham­ber, too—hard­line con­ser­vat­ives likely would ob­ject to the bill’s off­sets, while hard­line lib­er­als could res­ist en­ti­tle­ment cuts in ad­di­tion to lob­by­ing for a bet­ter deal on CHIP, which doesn’t ac­tu­ally need to be reau­thor­ized un­til Septem­ber.

In short, lead­ers from both parties, in both cham­bers, have about two weeks to fig­ure out a policy agree­ment that keeps hos­pit­als quiet, keeps AARP quiet, still makes doc­tors happy, and that can pass with bi­par­tis­an sup­port. If they can’t, they’ll have to re­vert to an­oth­er short-term patch—the 18th tem­por­ary fix—and the quest for a per­man­ent bill will start over in a few months.

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