House Passes Payment Fix For Medicare Docs, But At What Cost?

By Julie Rovner

Published March 15, 2014 at 6:00 AM EDT

Medicare's payments to doctors will likely be slashed April 1, unless the U.S. Senate can quickly get a derailed compromise back on track.

Bipartisan support dissolved this week for compromise legislation that would have fixed a longstanding problem with the way Medicare pays physicians. Though the bill passed the House of Representatives Friday, it now contains a provision almost certain to invite veto unless a Senate version can quickly nudge the ultimate bill back toward compromise.

Republican leaders in the House finally brought to a vote this week the legislation they'd unveiled in February.

It was the product of several years of collaborative work by the Republican and Democratic leaders of the key congressional committees that oversee the Medicare program. The leaders, from both houses of Congress, also got input and buy-in from physician groups, and from groups representing Medicare patients.

The bill is meant to permanently fix a problem with the payment formula. As is, that formula calls for deep cuts in Medicare payments to doctors, and has required regular intervention by Congress over the years to avert those cuts.

But to offset the cost of canceling those cuts and providing Medicare doctors with a small payment increase over the next five years instead, lawmakers had to come up with $138 billion. And last week GOP leaders in the House decided to do that in a most controversial way: by inserting language that delays implementation of the penalties for the so-called "individual mandate" provisions of the Affordable Care Act.

The bill passed the House Friday, by a vote of 238 to 181, but over the heated objections of Democrats, who in many cases had helped draft it.

"This bill will pass today and go nowhere," said Rep. Frank Pallone, D-N.J., a senior member of the House Energy and Commerce Committee. "It will not be taken up by the Senate. It will not be signed by the President. You have single-handedly, in my belief, stomped on months and months of hard work and effort by my colleagues on both sides of the aisle and our staffs."

Indeed, earlier in the week, the Obama Administration said in no uncertain terms that, because of the funding mechanism the bill includes, the president "would veto" it if it reached his desk.

Rep. Sander Levin, D-Mich., of the House Ways and Means Committee, was one of several who described the insertion of the funding mechanism as putting "a poison pill into a bipartisan product."

Republicans, however, defended their "pay-for." Energy and Commerce Committee Chairman Fred Upton, R-Mich, recited a long list of other parts of the health law that the Obama Administration has already delayed. "If the Administration has decided to delay all these things — almost two dozen — why not delay this, too?" he said. "And why not use the savings then, not only to help the physicians ... it's to help the most vulnerable, our seniors."

But Rep. Henry Waxman, D-Calif., the senior Democrat on Upton's committee, pointed out a big difference between the GOP delay and the ones implemented by the Administration. "None of those delays result in 13 million more people being uninsured and premiums going up 10 to 20 percent," said Waxman, citing the estimate by the Congressional Budget Office.

Groups supporting the underlying Medicare physician bill were unhappy, too, that the measure has gotten bogged down. A letter from the American Medical Association's executive vice president, James Madara, expressed his organization's "profound disappointment that a strong bipartisan, bicameral effort to repeal the Medicare sustainable growth rate (SGR) has become a victim of partisan approaches to resolve budgetary issues.

But several Republicans who worked in negotiating the initial compromise tried to stress that not all is lost — even though time is running out before the latest short-term fix expires on March 31.

"The bill you have on the floor today is not the destination," said Rep. Michael Burgess, a physician and Republican from Texas. "It is the key that gets you through the door that gets you to the destination," he says.

Burgess and other like-minded Republicans are hoping that the Senate can swiftly pass its own bill — and that then a compromise acceptable to all can be worked out. The bill likely to come to the floor in the Senate, however, has the opposite problem. It may not have any funding-offset at all.