Baucus Ready to Push for ‘Doc Fix’

Baucus: No deal on tax cuts until after Thanksgiving.
National Journal
Billy House
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Billy House
Nov. 21, 2013, 12:19 p.m.

Sen­ate Fin­ance Com­mit­tee Chair­man Max Baucus says his pan­el will con­sider so-called “doc fix” legis­la­tion  to re­peal the rate for­mula used for phys­i­cian re­im­burse­ment un­der Medi­care when law­makers re­turn to Wash­ing­ton in Decem­ber.

The Montana Demo­crat sent out a no­tice Thursday to fel­low com­mit­tee mem­bers an­noun­cing they will meet in “open ex­ec­ut­ive ses­sion” on Dec. 12 “to con­sider an ori­gin­al bill to re­peal what is of­fi­cially known as the Medi­care Sus­tain­able Growth Rate (SGR) for­mula.”

The le­gis­la­tion that Baucus will of­fer will be dis­trib­uted 48 hours be­fore the start of that meet­ing.

However, there re­main sig­ni­fic­ant stum­bling blocks to any ma­jor over­haul of the doc fix — in­clud­ing how to pay for it — even as bi­par­tis­an sup­port for re­peal has gained mo­mentum.

Un­less Con­gress acts by Jan. 1 in some man­ner, Medi­care phys­i­cian pay­ments will be cut by about 24.4 per­cent.

At the root of the prob­lem is that the SGR for­mula en­acted in 1997 as a way of con­trolling Medi­care spend­ing es­tab­lished a fee sched­ule with cal­cu­lated an­nu­al up­dates for more than 7,000 phys­i­cian ser­vices un­der Medi­care. But as the eco­nomy began to slow and health care costs began to out­pace gross do­mest­ic product growth, the for­mula pro­duced de­creases in phys­i­cian fees each year, start­ing in 2002.

Over the past 10 years, Con­gress has spent nearly $150 bil­lion on short-term SGR patches or “over­rides” to pre­vent such cuts, either by in­creas­ing phys­i­cian pay­ment rates or freez­ing rates to pre­vent de­creases. But each year that has pro­duced un­cer­tainty for phys­i­cians about wheth­er or when their Medi­care re­im­burse­ments will be cut.

On Oct. 31, Baucus and Fin­ance Com­mit­tee rank­ing mem­ber Or­rin Hatch, R-Utah — joined by House Ways and Means Chair­man Dave Camp, R-Mich., and that pan­el’s top Demo­crat, Rep. Sander Lev­in, D-Mich. — re­leased a “dis­cus­sion draft out­line” on per­man­ently fix­ing the SGR. That draft called for an SGR re­peal that would in­clude a 10-year freeze and a per­form­ance-based in­cent­ive pro­gram start­ing in 2017.

While Baucus is now mov­ing for­ward with his ver­sion of a bill, Camp’s com­mit­tee in the House con­tin­ues to take “the feed­back from the draft re­leased last month and [is] eval­u­at­ing com­ments,” said an aide.

It re­mains un­cer­tain how any per­man­ent SGR fix, or an­oth­er tem­por­ary one, might ul­ti­mately be ap­proved this year, either as a stand-alone item or part of a lar­ger budget bill pos­sibly be­ing worked out by a bi­par­tis­an budget con­fer­ence com­mit­tee.

It also is not clear where budget off­sets might be found to pay for a per­man­ent re­peal. The Con­gres­sion­al Budget Of­fice es­tim­ated earli­er this year that it would cost about $139 bil­lion over 10 years, which was lower than pre­vi­ous CBO es­tim­ates.

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