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As health lobby looks past supercommittee, ‘doc fix’ trumps new Medicare cuts
Healthcare lobbyists quickly pivoted Monday from the deficit-cutting supercommittee to looming cuts in Medicare payments to doctors.
The congressional supercommittee’s failure to reach an agreement on the federal deficit triggers a 2 percent across-the-board cut in Medicare payments. But those cuts don’t take place until 2013, leaving plenty of time to search for an escape hatch. The more pressing concern in the immediate aftermath of the supercommittee announcement is a nearly 30 percent cut in doctors’ payments that is set to kick in at the end of this year.
The supercommittee’s demise is a mixed bag for the American Medical Association and other groups that wanted the 12-member panel to tackle Medicare's payment formula, known as the sustainable growth rate (SGR).
The AMA — with bipartisan support in Congress — pushed hard for the supercommittee to include in its deficit-cutting package a long-term fix to the SGR. The formula calls for automatic annual cuts in doctors’ payments, which add up as Congress consistently delays each cut from taking effect.
"I never once believed that the Joint Select Committee would be the one to do that," said Julius Hobson, a senior adviser at DC law firm Polsinelli Shughart and a former AMA official.
Hobson said a one- or two-year patch is probably the best doctors can hope for — noting that a one-year delay would require a lame-duck Congress to take up the SGR again after next year's election. Other healthcare lobbyists said they wouldn’t be surprised to see an even shorter measure.
But while the AMA didn’t get the long-term solution it wanted from the supercommittee, the committee’s failure spared the doctors' lobby an even worse outcome.
If the supercommittee had reached a deal on deficit reduction that didn’t include the SGR, it likely would have picked off the easiest offsets for a stand-alone "doc fix" at the end of the year. A fix of any length will probably be offset with cuts to certain providers. Those options are at least still on the table as Congress looks toward a shorter-term SGR fix before the scheduled cuts take effect next year.
But the next "doc fix," however, long it might be, won't be the end of Congress's hunt for healthcare savings.
Health industries were divided over the supercommittee from the beginning. Medicaid is shielded from the automatic cuts under sequestration, so some providers that rely more heavily on Medicaid than Medicare might fare better under the trigger than they would have if the supercommittee had reached a deal, which might have included Medicaid.
Eric Zimmerman, a partner at DC law firm McDermott Will & Emery, said the supercommittee’s failure is no reason for healthcare industries to think they’re off the hook.
"It’s just a matter of time before we’re back in same kind of dialogue," he said.
