Senate Approves 12-Month ‘Doc Fix,’ Sends Bill to Obama

On Monday, the Senate passed a House-approved measure (HR 4302) that would delay for 12 months a scheduled 24% cut to Medicare physician reimbursement rates, the Washington Post's "Post Politics" reports. The bill now goes to President Obama, who is expected to sign it before the scheduled cuts take effect on Tuesday (Lowery, "Post Politics," Washington Post, 3/31).

The current three-month "doc fix" expires on April 1. House and Senate lawmakers had been working to develop final legislation that would permanently repeal and replace the sustainable growth rate formula. However, disagreements over cost offsets in separate Democratic and Republican-sponsored proposals threatened to prevent a final bill from being passed before Monday.

Last week, House Speaker John Boehner (R-Ohio) announced that he and Senate Majority Leader Harry Reid (D-Nev.) agreed on the proposed legislative patch. The House on Thursday passed the measure by voice vote.

Details of SGR Patch

The compromise measure contains a slew of additional health care provisions and benefits for physicians, hospitals, drug makers and other providers.

For example, the proposal would:

• Grant Medicare physicians a 0.5% fee increase through the end of 2014;
• Provide higher Medicare payments to hospitals in rural areas and for ambulance services in such areas;
• Establish two new mental health grant programs, one of which would receive $60 million over four years to improve outpatient treatment for individuals with serious mental illnesses;
• Delay the deadline to implement the new ICD-10 diagnostic and procedure code sets by one year, to Oct. 1, 2015;
• Delay implementation of the new inpatient payment rule for hospitals, known as the two-midnight rule, by six months, to March 2015; and
• Implement $2 billion in payment reductions over 10 years to skilled nursing providers.

In addition, the compromise proposal would delay by an additional year -- to fiscal year 2017 -- the start of scheduled annual Medicaid reductions to hospitals that treat a disproportionate share of low-income patients. The expiring three-month SGR patch had already delayed the start of the cuts to FY 2016, which would continue through FY 2023 (California Healthline, 3/27).

Senate Vote

The Senate on Monday passed the measure in a 64-35 vote, with 46 Democrats, 16 Republicans and two Independents voting in favor of the legislation (Peterson, Wall Street Journal, 3/31).

According to Reuters, the vote represents the 17th time that Congress has temporarily averted the scheduled cuts (Ferraro/Cornwell, Reuters, 3/31).

Reaction

Several groups in the medical industry voiced disapproval for the temporary legislation, arguing that Congress should have instead focused on passing a permanent measure. Lawmakers also expressed frustration over the short-term measure (Wall Street Journal, 3/31).

Reid said that he was "pleased" that Congress was "able to come to an agreement to vote today on a 12-month fix to the Medicare physician payment system" but added that the "fact remains that the agreement we have in place is not ideal ... Regrettably, we just don't have the votes right not to fix this problem for good" ("Post Politics," Washington Post, 3/31).

Meanwhile, Sen. Orrin Hatch (R-Utah) said that the temporary patch has become "basically an annual ritual that we have to go through here." He added, "Once this legislation is signed into law, we need to get back to the negotiating table" (Wall Street Journal, 3/31).

Separately, Sen. Ron Wyden (D-Ore.) -- who has proposed a permanent SGR repeal and replacement measure, and who voted against the temporary legislation -- said, "We'll punt, patch it up and let that SGR limp along just as it has year after year." He added, "Every senator that I talked to says that that just defies common sense" ("Post Politics," Washington Post, 3/31).

Sen. Tom Coburn (R-Okla.) similarly argued that the bill is "a sham ... nothing but gimmicks," adding, "We are going to put off until tomorrow what we should be doing today" (Taylor, AP/U-T San Diego, 4/1).

Despite the rancor over the short-term measure, many lawmakers agreed that the temporary patch was necessary to prevent the cuts from taking effect. Reid said, "For the millions of elderly Americans and their doctors, this fix is good news" (Wall Street Journal, 3/31).