Democrats debating how to handle Medicare 'doc fix,' COBRA subsidy extension

May 20 2010

Some Democrats are concerned that adding a Medicare physician payment "fix" to tax legislation will add to the debt and are considering dropping the provision.

The Washington Post: Democrats discussed two spending measures at their caucus meeting Tuesday. One of them "would extend a variety of expired tax cuts, unemployment benefits and aid to cash-strapped state governments while preventing a big pay cut from taking effect at the end of the month for doctors who see Medicare patients."

But Democrats are becoming uneasy about their prospects, particularly with voters, if they continue to approve more spending. "Together, the two measures are expected to cost more than $250 billion, aides said, much of it financed with borrowed funds." The "doc fix" would cost $88.5 billion over five years. The overall bill is "a proposal some lawmakers in both parties say they will oppose if it increases the deficit" (Montgomery, 5/19).

CongressDaily: "House and Senate Democrats might scale back the cost of a fix to prevent Medicare physician payment cuts to attract moderate votes. … Congress has been under pressure from interest groups and the White House to pass a permanent Medicare physician fix. 'For years, Congress has come in at the last minute every year or every couple years,' White House Office of Health Reform Director Nancy-Ann DeParle told emergency room physicians Monday. 'President Obama thinks it's time to fix this ongoing problem and we're working with Congress to try to do that.'" If combined with other extensions of programs such as unemployment extensions, COBRA health benefits for the laid-off and Medicaid payment assistance for states — which would like cost $25.5 billion — the bill could end up costing as much as $170 billion (Cohn, 5/19).

The Hill: The American Medical Association is opposing the inclusion of the "doc fix" in the bill. "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. … 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 (which don't allow deficit spending). 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" (Pecquet, 5/18).

Politico: "Unable to win over Republican moderates in the Senate, Democrats are resigned to scrapping much of an ambitious five-year, $90 billion-plus plan to provide Medicare physicians with a little more certainty as to their reimbursements" and have turned their attention to other parts of the bill, particularly at paying for the bill with reforms to investment fund managers who shelter their incomes from capital gains taxes (Rodgers, 5/19).

The Hill: "... Congress may pass a short-term fix to Medicare physician rates and punt a longer-term fix until after the August recess to save money." On the Medicaid dollars, "[a]lready, at least 24 states that have drawn up their budgets for the coming year are counting on extra federal Medicaid dollars that were in the House- and Senate-passed versions" of a bill. "Both versions would extend these enhanced federal Medicaid payments for six months"  (Pecquet, 5/18).