House Republicans push for long-term 'doc fix'

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Repealing the Medicare payment formula has long had bipartisan support, and it’s far and away the No. 1 lobbying priority for doctors’ groups. But the effort got a big push earlier this week, when the Congressional Budget Office slashed its cost estimate for repeal by roughly $100 billion.

That discount helped energize the renewed push for a fix, the Energy and Commerce aide said Thursday.

According to CBO, repealing the current payment formula and leaving doctors’ payments where they are now would cost $138 billion over 10 years — no small amount, but still far less than the estimates that have stymied a broader doc fix in the past.

“It is time to bring Medicare into the 21st century," Ways and Means Chairman Dave Camp (R-Mich.) said in a statement. "Achieving that goal will be an all hands on deck effort, and we want all the stakeholders — doctors, patients, and others — to be a part of that process.”

The problem stems from Medicare’s Sustainable Growth Rate (SGR) formula. The SGR calls for automatic Medicare cuts every year, but Congress almost always steps in to delay the scheduled cuts. They then accumulate; by now, doctors would face nearly a 30 percent reduction in their Medicare payments if Congress failed to step in.

And as the size of the cut snowballs, so does the cost of delaying it. Although each six-month or one-year fix costs less than repealing the formula, Congress has ultimately, cumulatively spent far more on short-term fixes than it would have to for a long-term solution.

The framework announced Thursday only came from GOP leaders on the two committees with jurisdiction on the issue, but the aide said the process will be bipartisan, and doctors, seniors’ groups and other stakeholders will have a chance to offer more input.

The aide declined to give a firm deadline for action but noted that the most recent doc fix expires at the end of the year. Rep. Allyson Schwartz (D-Pa.) said as she introduced a long-term doc fix bill this week that Congress should act before that patch expires, rather than wait for another crisis atmosphere at the end of the year.

Aside from the cost, one of the problems holding back a larger doc fix has been the question of what should replace the formula. There’s broad agreement in both parties that doctors should be paid based on the health of their patients rather than for each service they perform. But that’s a major transition and one that many stakeholders don’t want to rush.

Thursday’s framework calls for three phases. First, Congress would repeal the SGR and enter a period of “predictable, statutorily defined physician payment rates.” That would give lawmakers some time to figure out a new payment system that focuses on quality. The third phase calls for fine-tuning that new system by also rewarding doctors who provide cost-efficient care.