Medicare payment hitch not addressed in health bill

With President Obama having signed an enormous, $938 billion health reform proposal into law Tuesday, it’s tempting to imagine that the long-drawn and ubiquitous debate over health care legislation is over for a while. If only it were so.

Pres. Obama signs the health reform bill Tuesday. (Pete Marovich/ZUMApress.com)

Pres. Obama signs the health reform bill Tuesday. (Pete Marovich/ZUMApress.com)

Neither the bill that was signed yesterday nor the accompanying reconciliation proposal moving through the Senate this week addresses the flawed formula that dictates physician payments under Medicare — one of the most agonizing and expensive problems facing the entire health delivery system. The omission has left doctors facing a 21-percent cut in their Medicare payments at the end of the month; it’s threatened Medicare patients with access-to-care problems; and it’s inspired the powerful doctors lobby to undertake an all-out blitz in search of a permanent formula fix. It’s also put Democratic leaders in the odd position of celebrating the historic significance of their health care overhaul, while at once plotting a strategy to prevent doctors from suffering huge cuts not addressed by those reforms.

At issue is the 13-year-old formula — the so-called Sustainable Growth Rate (SGR) — that was designed to prevent Medicare doctor payments from skyrocketing by indexing reimbursements to the growth of the economy on the whole. Trouble is, health care inflation has grown by degrees faster than GDP in recent years. Indeed, the SGR has called for cuts in doctors’ Medicare pay every year beginning in 2002. That’s a perennial thorn in the side of Congress, which, having no stomach for alienating the powerful physician lobby, almost always steps in with a temporary fix.

This year, though, the temporary fix also threatens to alienate the AMA.

“The AMA cannot support proposals that aim to address only the most imminent threat to payments levels and patient access, with no regard for the future of the Medicare [program],” AMA President James Rohack wrote to Senate leaders earlier this month. “We are opposed to further short-term patches of any duration.”

Lawmakers on both sides of the aisle are well aware of the problem. Speaking to reporters at the Capitol last Friday, House Speaker Nancy Pelosi (D-Calif.) said that a permanent doc-fix remains “very important” to Democrats. “It’s not in this bill, but we will have it soon,” Pelosi said. “We have made a commitment to do this.”

The issue is hardly partisan, nor will it have any effect on the larger reform bills recently passed by the Democrats. But the fix doesn’t come cheap. Indeed, a bill passed by the House in November would scrap the SGR altogether, replacing it with a formula designed to ensure that doctors’ Medicare payments reflect the true cost of delivering care. Pricetag: $210 billion.

It was that cost — which wasn’t offset with new revenues or cuts elsewhere — that caused the budget hawks of the Senate to shoot down a similar proposal a month earlier. And it was that cost that caused Democrats — who’d vowed both to keep their reform package below $1 trillion and to offset the entire tab — to strip the doc fix from the larger reform bills.

The issue has left Democrats in a pickle: In an election year, they don’t want to alienate the AMA. But with voters already weary of deficit spending, nor can they borrow another $210 billion to fund a permanent fix.

“Any way you look at it, I don’t see how they get 60 votes [in the Senate],” said Julius Hobson, former AMA lobbyist and now a senior policy analyst at the Washington law firm Bryan Cave.

Lawmakers don’t have much time. On April 1, Medicare payments to doctors are scheduled to fall, on average, by 21 percent. Both the House and Senate have recently passed bills to delay the cut temporarily — the House by one month and the Senate by seven months. But when Senate Democrats tried Friday to adopt the House bill by unanimous consent, Republicans refused.

A spokeswoman for Senate Majority Leader Harry Reid (D-Nev.) said Tuesday that Democrats will likely try that strategy again this week, after they’ve finished the debate over the health reconciliation bill. Complicating matters, Congress is scheduled to leave Friday for spring recess, and won’t return to Washington until April 13. That timetable leaves open the possibility that Congress would have to tackle the 21-percent cut retroactively — an uncertainty that’s been a thorn in the side of doctors trying to manage their businesses.

“For the physicians in actual practice,” Hobson said, “this is a nightmare.”

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Mike Lillis

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