Panel Reaches Deal on Extension of Payroll Tax Cut, Medicare 'Doc Fix'

Late Wednesday evening, the conference committee charged with developing an extension of the payroll tax cut, continuing unemployment benefits and delaying scheduled cuts to Medicare physician reimbursement rates came to a finalized agreement (HR 3630), the New York Times reports.

Negotiations concluded with about an hour to spare before a midnight deadline to prepare a bill for a House vote on Friday (Steinhauer/Pear, New York Times, 2/15).

Leaders of the committee hope the bill will be ready for President Obama's approval before the congressional recess starts at the end of this week (Goldfarb/Weyl, CQ Today, 2/16).

About the Deal

The agreement includes a 10-month "doc fix," which would allow Medicare to maintain current physician reimbursement rates, delaying a 27.4% reduction in fees set to start on March 1 (Taylor, AP/Boston Globe, 2/15). To offset the $20 billion cost of the doc fix, the agreement would:

  • Cut $5 billion from the prevention and public health fund created by the federal health reform law;
  • Reduce aid to hospitals when Medicare beneficiaries do not pay for services (CQ Today, 2/16); and
  • Reduce Medicaid funding to Louisiana, which received increased funding from the overhaul (Bendavid/Hughes, Wall Street Journal, 2/16).

Democrats, GOP React to Agreement

Democrats were more enthusiastic than Republicans about the finalized agreement, CQ Today reports.

Rep. Henry Waxman (D-Calif.) and other Democrats were not pleased to cut funding to health care programs, but Waxman said the agreement is "not so bad I would vote against it" (CQ Today, 2/16).

Although Democrats said the prevention and public health fund is critical in order to "spend health care dollars more wisely," the cuts could make the bill more appealing to members of the GOP (Wall Street Journal, 2/16).

Sen. Lindsey Graham (R-S.C.) said, "Not going to do this again, but if it gets us through the year, gets this issue off the table, it's worth doing this way" (AP/Boston Globe, 2/15).

Physicians Criticize Conferees for Missed Opportunity on SGR

Physicians groups criticized the committee for failing to permanently repeal the sustainable growth rate formula, Modern Healthcare reports (Zigmond, Modern Healthcare, 2/15).

American Medical Association President Peter Carmel in a statement said the group is "deeply disappointed that Congress chose to just do another patch -- kicking the can, growing the problem and missing a clear opportunity to protect access to care for patients."

The American Osteopathic Association in a statement said the "scenario was avoidable," and criticized the group for rejecting a "fiscally responsible proposal that would have repealed the SGR and placed Medicare on a more stable financial path" by using war savings to offset the costs (Reichard, CQ HealthBeat, 2/15).

Michael Samms
Kicking the SGR can 10 months down the road will give Congress the opportunity to consider a new healthcare innovation that will pay for the cost of the 'doc fix'. Congress should identify the innovation which will pay for itself and cover the increased cost associated with SGR elimination.

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