House Passes Doc-Fix, Dems Say It Will Be Dead On Arrival in Senate

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House Republicans successfully passed legislation on Tuesday that postpones a 27 percent cut to Medicare physician reimbursements slated for Jan. 1, and also extends the $1,000 payroll tax break scheduled to expire this year.

The bill contains a provision known as the “doc-fix” because it fixes the massive cuts triggered each year by Medicare’s Sustainable Growth Rate formula. If passed into law, the legislation would postpone the SGR cut and instead increase Medicare physician payments by 1 percent for each of the next two years.

However, Democrats say the bill puts too much of the burden to pay for the $38 billion fix on middle-income taxpayers. Senate Majority Leader Harry Reid (R-Nevada) says the bill is dead on arrival according to the Washington Post, and President Obama has said he plans to veto it in its current form.

The bill also garnered steep opposition by the American Hospital Association and eight other national hospital groups in a letter to Congress this week.

The hospital groups say the bill sacrifices $17 billion over 10 years in hospital funding, including $6.8 billion in cuts to hospital outpatient evaluation and management services. The bill also eases certain restrictions on physician self-referral to physician-owned hospitals, a provision they say would add $300 million to the federal deficit.

To get their point across, the Coalition to Protect America’s Health Care, which includes the AHA, announced this week a national advertising campaign to oppose cuts to hospitals.

“While hospitals support a long-overdue physician payment fix, cutting billions of dollars from hospital care to pay for it "is wrong and irresponsible — and will result in fewer nurses, longer waits for emergency care and less access to care and new treatments," the ad states.

To counter those assertions, a summary by the House Ways and Means Committee made available by Modern Healthcare, says the bill would reduce Medicare Part B premiums by roughly $1.7 billion and lower member co-payments by more than $11 per visit.

Even if Congress does not reach agreement on a doc-fix before New Year’s, physician reimbursement payments could be made retroactively as they have in years past. The prospects of that, however, may present "nightmare" administrative and billing problems for both providers and CMS, former CMS Administrator Tom Scully, says in a recent Politico article. Scully headed CMS in 2003 when a SGR fix was made retroactively in January.

For diagnostic imaging providers, it is notable that the bill passed by the House does not contain savings from a multiple procedure payment reduction for radiologists.