AMA opposes 'doc fix' in tax legislation

The American Medical Association is opposing the Medicare "doc fix" included in the tax extenders bill House Democrats are preparing.

AMA argues the proposed fix to the Medicare payment system for physicians doesn’t address the program’s solvency issues and only pushes the problem five years down the road.

A summary of the tax extenders bill circulating on K Street says the bill will include a fix to the Medicare payment that would avert a 21.3 percent payment cut set to hit physicians on June 1. It also says it would include reforms to “ the physician payment system.”

The summary does not indicate the duration of the fix, but House Democrats have talked about passing a five-year fix. A number of senators, however, have balked at a five-year fix if the cost of the increased payments to doctors are not offset with other spending cuts or tax increases.

“Based on conversations with policy makers, the American Medical Association cannot support an emerging proposal to address the flawed Medicare physician payment formula,” Kenneth Hopson of the AMA’s Division of Federal Affairs wrote to members in an e-mail obtained by The Hill.

“The result in five years would be steeper cuts for physician practices, making it much more difficult, if not impossible, to achieve the objective of permanently repealing the Sustainable Growth Rate (SGR).”

Democrats are also planning to include a new summer jobs program favored by the Congressional Black Caucus and an increase in taxes on hedge fund managers in the extenders bill, according to the summary.

The bill would extend an unemployment insurance program providing a jobless worker with up to 99 weeks of benefits through the end of the year, the summary states. It also includes COBRA healthcare benefits for the jobless, flood insurance, federal bonds for state and local government public works projects and federal loans for small businesses with reduced borrowing fees, among other provisions.

The summer jobs program would provide temporary summer jobs to people ages 16 to 21, a group whose jobless rate is far higher than the national unemployment rate of 9.9 percent.

The summary also has a six-month extension of enhanced Medicaid payments to states, estimated to cost $25.5 billion.

The AMA is calling for a permanent repeal of the sustainable growth rate which would cost about $250 billion - most of which would have to be paid for under House “pay-go” rules.

But the group estimates that repealing the SGR in five years would cost more than $500 billion, and is urging its members to press lawmakers for a permanent repeal.

“Failure by Congress and the Obama Administration to properly solve this issue will intensify access problems for seniors and military families enrolled in the TriCare program, and severely undermine implementation of recently enacted health system reform legislation, Hopson wrote. “An existing physician shortage will be magnified and steeper cuts will prevent practice and delivery innovations.”

To view a PDF of the tax extenders bill click here