House, Senate leaders agree on 12-month 'patch' preventing Medicare fee hikes

3/26/2014

WASHINGTON — Congressional leaders agreed today on legislation to avert a threatened 24 percent cut in fees to doctors who treat Medicare patients, and said votes were likely in both houses before Monday’s deadline.

The legislation would prevent the cut for 12 months. The heavily-lobbied measure also contains numerous other health care provisions of interest to doctors, hospitals, drug companies and other health care providers.

The House was on track to vote Thursday under special expedited procedures that require a two-thirds vote to pass, and there was at least some uncertainty that the measure would advance; Senate action also was uncertain.

Because of a flawed formula dating to 1997, Medicare doctors are threatened with big fee cuts almost every year. After allowing a 4.8 percent Medicare fee cut to take effect in 2002, Congress has since stepped 16 times to prevent the cuts and must act again by midnight Monday to avoid them this time.

When Congress has blown the deadline in the past, Medicare has dealt with the problem by simply delaying processing payments until the formula had been raised.

Senate Majority Leader Harry Reid, D-Nev., is likely to seek to speed the measure through the Senate as early as Thursday, but it would take cooperation from all 100 senators to make that happen.

The move for yet another temporary fix comes as efforts for permanently solving the recurring Medicare problem are foundering. There is widespread support for bipartisan legislation to repair, once and for all, the broken Medicare formula but there is no agreement on how to bear the 10-year, $140 billion cost.

“The permanent fix that’s being talked about is a good fix, and there’s an agreement — bipartisan, bicameral agreement on the long-term fix,” House Speaker John Boehner, R-Ohio, said. “What there isn’t agreement on is, ‘how are we going to pay for it?’” He said there would be a vote on the temporary fix Thursday in the House, where some senior Democrats were still pressing for a permanent solution.

New Senate Finance Committee Chairman Ron Wyden, D-Ore., wants to keep working on a permanent solution. He proposes using savings from lower costs for operations in Afghanistan. Republicans are demanding savings from President Barack Obama’s health care law. The resulting impasse has left lawmakers little alternative than to move another temporary fix.

“If you just keep going with these temporary solutions, you waste time, you waste money, you threaten the access for seniors to their doctors,” Wyden said, “And the reality is, the patches as they are called, they’re not free either. You still have to come up with the money.”

The measure blends $16 billion to address Medicare physician’s payments with about $6 billion more for a variety of other expiring health care provisions like higher Medicare payments to rural hospitals and for ambulance rides in rural areas. It contains about $23 billion in cuts, according to aides familiar with preliminary Congressional Budget Office estimates.

It also contains a provision benefiting, among others, Amgen Inc., which produces an oral drug for kidney dialysis patients. It would extend through 2024 a controversial provision to allow payments for Sensipar, which is made by Amgen, to be made on top of other “bundled” payments made to treat Medicare patients with kidney disease. It also eases cuts to dialysis providers who have battled with drug companies over the issue.

The measure also delays implementation of newer, more precise Medicare treatment and payment codes, which has upset the health care information management industry and specialty physicians who stand to benefit from the updated codes. But doctors are happy since it saves them from having to pay a lot of money to upgrade their payment systems.

The temporary measure is financed by a variety of familiar cuts to health care providers, though some gamesmanship is being employed. For instance, the measure includes additional cuts to hospitals that treat a “disproportionate share” of uninsured and Medicaid patients — but delays planned implementation of existing cuts for a year. The authors of the bill also use budget gimmicks to squeeze more savings from a Medicare providers’ payment cut that is 10 years down the road.

The measure would give Medicare doctors a 0.5 percent fee increase through the end of the year. It also creates two new mental health grant programs, including $60 million over four years for outpatient treatment for people with serious mental illness. It adjusts the fee schedule under Medicare for providers who treat patients in California, a step designed to adjust for population growth.