Congressional Leaders Discuss Medicare ‘Doc Fix,’ Payroll Tax Break
On Wednesday, House Speaker John Boehner (R-Ohio) met with Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.) to discuss strategies for extending a payroll tax break and delaying scheduled reimbursement cuts to Medicare physicians, Politico reports.
The three emerged from the meeting without a deal. Boehner said Reid and McConnell will have to work out certain details between themselves (Raju/Sherman, Politico, 12/14).
The meeting comes after the House on Tuesday voted 234 to 193 to pass a GOP-helmed payroll tax cut extension (HR 3630). The bill would extend a $1,000 payroll tax break that is set to expire at the end of 2011. Meanwhile, the "doc fix" would stave off a nearly 30% cut to Medicare physician payment rates that is scheduled to take effect on Jan. 1, 2012. Instead, the legislation would increase reimbursement rates by 1% over the next two years.
The plan would pay for the $38 billion fix in part by increasing Medicare premiums for high-income beneficiaries and by redirecting funding from the federal health reform law that was intended for prevention and public health services.
The bill's chances for passage in the Senate are slim, as Senate Democrats worry that the cost of the tax break extension will fall on middle-income residents. Senate Democrats were considering paying for the measure with a surtax on high-income individuals.
Certain Democrats and President Obama also oppose a provision in the House bill that would push ahead the stalled Keystone XL oil pipeline project. Some lawmakers said that if the GOP agrees to eliminate the pipeline provision and if Democrats agree not to levy the surtax, the parties could soon reach an agreement on a revised plan (California Healthline, 12/14).
According to Politico, Democrats on Wednesday discussed dropping their demand for the surtax, but it is unclear if Republicans would offer any concessions in exchange (Politico, 12/14).
Kyl Wants Permanent Doc Fix
Meanwhile, Senate Minority Whip Jon Kyl (R-Ariz.) has been lobbying lawmakers to develop a proposal to permanently fix the sustainable growth rate formula, which determines the scheduled reimbursement cuts, National Journal reports.
According to Kyl, the cost to offset such legislation is not real because the SGR only estimates hypothetical savings. He said the cost typically cited for offsetting an SGR repeal is a budget gimmick that represents the savings Congress would have if it had obeyed the formula. However, since lawmakers have delayed scheduled cuts for years, the government has not secured any of the savings, negating much of its repeal cost.
Kyl said he is not sure whether he can get Senate Republicans to commit to passing such legislation at the moment (McCarthy, National Journal, 12/14).
Reimbursement Cuts Could Happen, Physician Advocate Fears
On Wednesday, American Academy of Family Physicians President Glen Stream said that physicians by now are numb to the threat of reimbursement cuts but that they should keep in mind that the pay reductions actually could happen, Healthcare Finance News reports.
Stream said physicians' detachment from the current doc fix debate is "concerning because I think there's a very serious chance that this cut could go into place and yet many practicing physicians have heard this years and years in a row, and it always seems to get averted at the last minute." He added, "I think they may not understand the gravity of the situation this time" (Bouchard, Healthcare Finance News, 12/14).
However, sources say CMS could briefly delay the rate cut if lawmakers do not reach an agreement on doc fix legislation before the scheduled cuts take effect. The agency previously has held physician payments for a brief period while lawmakers finalized deals to delay the rate cuts (California Healthline, 12/12).
Lawmakers Also Consider Omnibus Spending Bill
Republicans on Wednesday introduced a House omnibus spending bill (HR 3671) derived from a House-Senate conference report containing nearly $1 trillion in fiscal year 2012 spending initiatives, National Journal reports (House/Goldmacher, National Journal, 12/14). Lawmakers face a government shutdown if they do not replace the stopgap spending bill that expires on Friday (Pear, New York Times, 12/14).
Republicans have accused Democratic leadership of delaying action on the spending package until the payroll tax and doc fix legislation is addressed. However, Democrats have denied those allegations (House, National Journal, 12/13).
The conference report includes nine unfinished 2012 appropriations bills, including those funding HHS and providing disease aid and recovery assistance (House/Goldmacher, National Journal, 12/14). The House and Senate nearly agree on the conference report aside from a few issues, such as House Republicans trying to prohibit the District of Columbia from using local tax revenue to pay for abortions under Medicaid (New York Times, 12/14).
Boehner said the House took the conference report and made it a bill because lawmakers agreed on the appropriations. He said, "We believe that the responsible thing to do is to move on this" (House/Goldmacher, National Journal, 12/14). However, Reid said the agreement was not final, noting "There are still major issues, critical issues, to be ironed out" (New York Times, 12/14).
In addition, White House officials said that President Obama also has problems with a number of provisions in the report and that Congress should pass a short-term continuing resolution so that the parties can take their time considering a larger package.
Analysts said Republicans wanted to move ahead with a vote so they can force Democrats to either accept the measure or vote it down and cause a government shutdown. The House Rules Committee is expected to hold a hearing on the bill as soon as Thursday (House/Goldmacher, National Journal, 12/14).