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Can Congress Solve Medicare's 'Doc Fix' Problems?

Joe Raedle/Getty Images File Photo
The biggest obstacle to fixing the flawed system that Medicare uses to pay physicians is the price tag. The CBO estimates that repealing the current payment formula would cost $116.5 billion over 10 years.

With all the enthusiasm and energy to get rid of the flawed system that Medicare uses to pay physicians, why isn’t it gone yet?

A huge obstacle is the price tag. The Congressional Budget Office has estimated that simply repealing the current payment formula for 10 years would cost $116.5 billion over that time. A House Energy and Commerce Committee bill to replace it would cost $153.2 billion over 10 years.

Nonetheless, lawmakers from both chambers and both parties during the past few months inched closer than ever to their longtime goal of tossing out the hated “sustainable growth rate” formula. They want to replace it with an approach that would implement more stable and predictable reimbursements.

But their work on a permanent solution will have to continue into next year, given that there are just a few days left in the 2013 session. With time running short, providers are now urging Congress to act to at least block the approximately 24 percent rate cut that will take effect on Jan. 1 — a short-term “doc fix.”

Lawmakers have not given up on a long-term replacement, though. The Senate Finance Committee has scheduled a Thursday markup of the joint legislative framework it has developed with the House Ways and Means Committee, which is also expected to hold a markup this week.

But expectations are that the proposal will move onto the 2014 agenda. It would be a long shot for lawmakers to approve that bill, reconcile it with the Energy and Commerce bill (HR 2810) and have both chambers pass the new legislation all before recess.

The likely short-term patch could last only three months, which would buy a little time for lawmakers to work out an agreement on the replacement legislation. Some stakeholder groups are urging that it not be any longer than that, so as not to lose momentum.

Ardis Hoven, president of the American Medical Association, said the group would support a short fix but that it would be “irrational” to “support a bad policy for another year.”

“To get a landmark bill to the finish line early next year, the AMA supports a very short term ‘bridge’ to stop the looming 2014 Medicare payment cut for just a couple months,” Hoven said in a statement.

Provider groups and lawmakers have for years derided those temporary patches, saying they merely spend money on continuing bad policy.

In addition, the uncertainty over the payment rates prevents physicians from making investments in their offices, and can lead some to stop seeing Medicare patients, provider groups say.

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