House Speeds Medicare ‘Doc Fix’ as Support Was Collapsing

The U.S. House passed a one-year delay of a 24 percent payment cut to physicians who accept Medicare patients, with Republican leaders pushing the bill through in a move that masked trouble finding the votes for it.

They solved the problem by simply not counting the votes.

The House approved the measure with untallied voice votes - - ayes first, then nays -- and the presiding officer, Representative Steve Womack of Arkansas, declared the votes sufficient. The bill now goes to the Senate.

The move sidestepped the opposition fueled by doctors’ groups, who were seeking a longer-term agreement instead.

“It was a take-it-or-leave-it deal” worked out by House Speaker John Boehner and Senate Majority Leader Harry Reid, Louisiana Republican John Fleming told reporters.

Senate leaders plan a March 31 vote on the House-passed measure. Under the agreement announced by Reid, a 60-vote supermajority will be required for Senate passage.

The bill would replace the estimated 24 percent cut in Medicare reimbursement rates for physicians and hospitals that was scheduled at the end of this month with a 0.5 percent increase through Dec. 31. There would be no increase from Jan. 1 through March 31, 2015.

Lawmakers of both parties generally agree on delaying the cuts, with one House leader saying there is some “flex time” in the March 31 deadline. They differ on whether to approve a short-term patch over the cuts, or to eliminate entirely the formula that requires them.

Medicare Spending

Spending on Medicare, the federal insurance program for the elderly and disabled, totaled about $580 billion in 2012, when it provided health care for 49 million Americans, according to the Centers for Medicare and Medicaid Services.

It’s projected to reach $1.123 trillion in 2022 -- more than the U.S. will spend this year on all discretionary spending, ranging from operating national parks to building aircraft carriers.

The cap on Medicare reimbursement rates, known as the sustainable growth rate, was supposed to serve as a check on spending. In practice, lawmakers have dodged and delayed scheduled cuts to payment rates every year since 2003.

It’s so common that bills to avoid the cuts now have a nickname: the “doc fix.” This will be the 17th time they’ve done so in a decade.

Doctors Opposed

Opposition from doctors’ groups threatened to kill the bill in the hours before its passage.

“An unprecedented, bipartisan agreement on Medicare reform is on the verge of being cast aside because elected leaders are unwilling to make tough choices to strengthen programs serving 50 million Americans,” a group of more than 80 physicians’ groups led by the American Medical Association wrote in a letter to House leaders yesterday.

Checks of where lawmakers stood on the one-year bill revealed uncertainty over whether it would pass.

Fred Upton, chairman of the Energy and Commerce Committee, was heard to say on the floor that the chamber should avoid taking a roll-call vote. House leaders stopped proceedings on the House floor for about a half hour while mulling their next move. They settled on Upton’s strategy.

The voice vote caught some lawmakers by surprise. Georgia Republican Lynn Westmoreland said that by the time he arrived on the floor after a bell summoning lawmakers to the chamber the bill had already passed.

“I have no idea” how the vote came about, he said.

Fleming said the strategy was cleared with leaders on both sides and members of the doctors’ caucus, which includes him.

Cut Targets

The sustainable growth rate was envisioned as “a way to ensure that medical-cost growth in Medicare didn’t go out of control,” said Kavita Patel, a fellow and managing director at the Brookings Institution in Washington who’s also a practicing primary care physician.

Congress didn’t then -- and still doesn’t -- have an appetite for cutting doctor payments. Rather, Patel said, the sustainable growth rate was focused on the “out years” when costs were projected to rise.

For the first few years after the 1997 formula was enacted, expenditures didn’t top the targets, according to a program summary compiled by the Congressional Research Service.

That changed in 2002 when the formula triggered a 4.8 percent cut to physician payments.

The next year, doctor payments were set to be reduced another 4.4 percent. Under lobbying pressure, Congress raised them 1.7 percent. In 2004, the cut would have been 4.5 percent. Instead, Congress raised rates 1.5 percent. It has continued that way since.

Ending Cuts

Lawmakers say they want to permanently end the cuts and face lobbying from doctors’ groups. Yet they’re stuck on a way to cover the cost, which would top $140 billion.

“It’s the pay-fors,” said Representative Joe Pitts, a Pennsylvania Republican and chairman of the House Energy and Commerce Committee’s subcommittee on health, when asked why lawmakers couldn’t reach a deal to end the cuts. “We had agreement on the policy, but the pay-fors, that’s a big chunk and we’re not close on that amount of money.”

Senate Finance Committee Chairman Ron Wyden said lawmakers face a choice between a patch “reinforcing a flawed payment formula” or a long-term measure that would provide certainty for seniors and doctors and end what he called a “budget fiction” that is the sustainable growth rate.

“My choice is to end the status quo,” Wyden, an Oregon Democrat, said in a statement. “There is no reason to wait.”

Until lawmakers can agree on a permanent solution, Reid told the Senate, they will have to pass the patch.

To contact the reporters on this story: Derek Wallbank in Washington at dwallbank@bloomberg.net; James Rowley in Washington at jarowley@bloomberg.net

To contact the editors responsible for this story: Jodi Schneider at jschneider50@bloomberg.net Mark Silva, Mark McQuillan

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