New GOP Healthcare Bill Will Contain Medicare 'Doc Fix'

January 20, 2011

January 20, 2011 — In the midst of party-line wrangling over healthcare reform, the House today demonstrated the bipartisan political will to solve the Medicare reimbursement crisis once and for all — if a single vote counts for anything.

One day after voting to repeal the Affordable Care Act, the GOP-controlled House today passed a resolution directing 4 House committees — Education and Labor, Energy and Commerce, Judiciary, and Ways and Means — to draft replacement legislation reflecting GOP priorities. The vote was 253 to 175, with Republicans unanimously backing the measure and 14 Democrats joining them.

However, the vote was 428 to 1 to approve an amendment to the resolution calling for a permanent fix to the sustainable growth rate formula that Medicare uses to set physician reimbursement. That formula would have triggered a 25% pay cut on January 1 had not Congress voted last December to delay it for 12 months. Organized medicine has warned that such a massive cut would drive physicians from the Medicare program, jeopardizing access to medical care for seniors as well as military families, whose TRICARE coverage is based on the Medicare fee schedule.

The amendment, offered by Rep. Jim Matheson (D-UT), enjoyed overwhelming bipartisan support. Rep. John Conyers (D-MI) cast the sole no vote, according to the online publication Politico.

GOP Could Turn to Fiscal Commission Report for Doc Fix Design

What the near-unanimous vote for a permanent "doc fix," as it is called in Congress, means in the long run is not exactly clear. The bill repealing the Affordable Care Act stands little chance of passage in a Democrat-controlled Senate, and a GOP replacement bill from the House faces the same fate. However, Congress is free to carve out a doc fix provision from any measure approved by the House and address it separately.

The amendment to the House resolution does not contain any specifics about what the proposed doc fix should look like. However, Congress can turn to an off-the-shelf solution from a bipartisan commission created by President Barack Obama to shrink the federal budget deficit. A report by the commission's co-chairmen, Alan Simpson and Erskine Bowles, called for freezing Medicare rates through 2013, reducing them by 1% in 2014, and then instituting a new pay formula the following year that rewards providers for the quality — not quantity — of their patient services.

There still remains the knotty problem of paying for a permanent doc fix at a time when Congress is loathe to engage in deficit spending. The Congressional Budget Office estimates that replacing the sustainable growth rate formula with one considered more equitable for physicians will cost more than $300 billion over 10 years. Some observers speculate that the GOP may attempt to come up with that money by trying to repeal expensive portions of the ACA.

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