Every year, lawmakers go through a ritual about as pleasant as a dental checkup.
For the past decade, Congress has passed a series of patches to prevent doctors who treat Medicare patients from seeing their reimbursements drastically cut. Each time, lawmakers grumble and talk about getting something permanent in place so they can end this detested exercise. And every year, they wait until the last minute and hastily patch it, only to repeat the routine.
This year was supposed to be different: The cost of a permanent fix was cheaper than ever, lawmakers got an early start on the legislation, and the two House committees of jurisdiction — Ways and Means and Energy and Commerce — were working together, bonded by their friendly Michigan chairmen.
Now, members are seeing their window of opportunity slamming shut before their eyes, thanks to the fiscal fighting that closed down the government and threatened to bring the country into default. “I am worried that the clock will run out,” says Rep. Kevin Brady, R”‘Texas, who chairs the Ways and Means Health Subcommittee.
Hope isn’t lost yet. “If” after “if” will decide the fate of this year’s “doc fix.” If the Ways and Means Committee gets its legislation out the door in time to pass it by the end of the year. If arguments over how to pay for it don’t threaten the rare bipartisan cooperation on policy. If Capitol Hill’s fiscal fights are over, or result in a larger package of reforms in which a permanent fix could find a home.
Brady and other Republicans see getting the doc fix done as the key to embarking on the rest of the Medicare reforms they say are a priority. They point to the latest report from Medicare’s trustees, which says the program’s hospital insurance trust fund will become insolvent in 2026 unless changes are made.
“I’m convinced we can’t achieve saving and extending the life of Medicare unless we first get the reforms of how we reimburse doctors right,” Brady said.
For Medicare reform, Brady is considering means-testing benefits; redesigning Parts A and B, the hospital- and medical-insurance portions of the program; exploring “site-neutral” payments for services, which would apply the same payment rates to visits in hospital outpatient settings and physician offices; and reforming post-acute-care payments.
The problem with the doc fixes began with the sustainable-growth-rate formula, which Congress passed as part of the Balanced Budget Act of 1997 in an effort to hold down Medicare costs. If Medicare expenses exceed the SGR in a given year, as they have since 2002, the law calls for cuts in physician payments the following year. Its flaws have been apparent for nearly as long. Over time, the deep cuts accumulate, making the cost of a fix higher the longer Congress waits.
This year, a ray of hope emerged in the form of a surprise Congressional Budget Office score. In February, the nonpartisan CBO announced that it was slashing the price of a 10-year fix to $138 billion, nearly half of previous estimates, partly because of a slowdown in the nation’s Medicare spending.
The reduced price tag was the starting gun in a year in which more progress toward a permanent fix was made than ever before. The Ways and Means and Energy and Commerce committees released a joint framework for change in February. Energy and Commerce even passed legislation unanimously in July, a feat that was much easier than a final solution will be, given that the committee didn’t touch pay-fors.
Ways and Means is expected to build on the Energy and Commerce framework, which sets a short-term period of stability for doctor payments while reforms to hold them down in the long run are tested. The Ways and Means Committee can also examine the CBO score of the Energy and Commerce legislation — $175 billion — for clues as to how to bring down the cost of any proposals. Still, even a cheap bill requires money from somewhere.
“I’m not sure that anybody at this point is very sanguine about us finding a way to pay for it,” said Rep. Jim McDermott, D-Wash., the ranking member on the Health Subcommittee. “And there’s been no serious discussion in the committee about who we’re going to go after, if we’re going to do this.”
Lobbyists who work closely on this issue offered a range of forecasts for how this is most likely to play out in coming months (Congress has until the end of the year before another temporary fix is needed); there was little agreement among more than a half-dozen of them interviewed by National Journal Daily. They did agree that Ways and Means was likely to put its own stamp on the Energy and Commerce policy even as it hews to the same broad framework, that it would try to get the cost down, and that the pay-fors, as usual, would threaten to derail the process in the end.
Another patch might not be fatal to this year’s progress, though. The same lawmakers will be in Congress next year. Work done in 2013 can be dusted off again in 2014. The ball might even be further down the field.
Still, everyone’s sick and tired of the routine. “Nobody really gains anything in this crazy charade we go through every year,” McDermott said. And it’s easy to see why his colleagues would be impatient, too: If the doc fix is the key to Medicare reform, as Brady argues, it’s also the pesky obstacle preventing the real meaty discussion of how to save Medicare. That may have to wait even longer.
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