Wyden open to 'doc fix' with war savings

Greg Nash

Senate Finance Committee Chairman Ron Wyden (D-Ore.) is interested in using war savings to pay for an overhaul of Medicare's flawed physician payment system.

A Wyden staffer emphasized to provider groups Wednesday that her boss is "very open" to making Overseas Contingency Operations (OCO) funds an offset for repealing Medicare's sustainable growth rate (SGR).

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The statement came in an email from Karen Fisher, a professional staff member with Democrats on the Senate Finance Committee, to K Street interest groups, and discussed the likelihood of a permanent "doc fix" this month. The email was obtained by The Hill.

"I have received some questions about the willingness to do OCO as a pay-for," Fisher wrote. "Chairman Wyden is VERY OPEN to considering OCO as a pay-for. If that is the position of your organization, please include that in your support letters … [and] convey this sentiment in your meetings with senators." 

The email sheds light on the status of negotiations over a permanent "doc fix." Lawmakers are closer than ever to repealing the SGR, but deciding how to offset the reform is proving a major challenge.

Wyden, the Finance Committee's newly installed chief, is hardly the first lawmaker to suggest war spending as a way to fund an SGR fix. The idea has been proposed by House Democrats and has support from major players in the medical community.

As recently as 2012, lawmakers seriously considered the OCO fund as a possible bank account for SGR repeal. But the idea was rejected by Republicans, who call the potential offset "funny money."

The Overseas Contingency Operations fund pays for the war in Afghanistan and other U.S. operations overseas. It is considered "off-budget" and is not subject to the sequester's budget caps.

A K Street source saw Wednesday's email as a way of pushing provider groups to rally behind the OCO as an offset.

Cuts to the healthcare sector, the expected way of funding a permanent "doc fix," would be tough to pass in an election year, leading both parties to seek other options.

Last week, the House passed a bill to repeal the SGR with revenue generated by delaying penalties under ObamaCare's individual mandate for five years. The legislation was rejected by Democrats, the White House and the healthcare world as unserious.

Lawmakers are hoping to pass a permanent "doc fix" in the single working week left before the current patch expires on March 31. Absent that unlikely possibility, they will approve another short-term fix in order to buy more time for talks.

The Congressional Budget Office scored the cost of Wyden's reform bill at $180 billion Wednesday.