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With 'Doc Fix' Dead for 2014, Congress Searches for Pay-Fors

By Melissa Attias, CQ Roll Call

December 5, 2014 -- Congress is set to close out the year without moving compromise legislation to replace Medicare's oft-criticized physician payment formula, leaving lawmakers with three months to act before doctors face a planned reimbursement cut of more than 20 percent.

Not advancing a permanent fix would be a huge defeat for physician groups and lawmakers such as Senate Finance Chairman Ron Wyden, D-Ore., who have been pressing for passage in the lame duck rather than having to start over next year.

The Senate Finance, House Energy and Commerce and House Ways and Means committees agreed on a policy (HR 4015, S 2000) in February to replace the Sustainable Growth Rate formula, or SGR. But disagreement about how to offset the cost scuttled the effort. Congress instead cleared its 17th "doc fix" law (PL 113-93) since 2003 to temporarily avert cuts of 24 percent. That funding patch expires March 31.

Debate over an omnibus spending bill to keep the government running and other pressing concerns have crowded the lame duck agenda and robbed any momentum for clearing a permanent fix.

"Nobody I know is trying to push it in the lame duck, especially with the mess that the lame duck is currently in," said Orrin G. Hatch of Utah, top Republican on the Senate Finance Committee and expected chairman in the 114th Congress.

Hatch said the issue will resurface in the spring, and added he'll do his best to get the matter resolved. 

Georgia Republican Johnny Isakson, another member of Senate Finance, confirmed the permanent fix is dead for the year. "There was a hope back a couple months ago that might happen, but it's not going to happen," he said.

House lawmakers were similarly deflated, in contrast to the optimism they expressed in September. Kevin Brady, chairman of the Ways and Means Health Subcommittee, said Congress has essentially given up on action in the lame duck.

"Negotiations are not going as well as we'd hoped," said the Texas Republican. "The transition, you know, to a new Senate is part of that and I'm not certain all the players understand the urgency of sitting down now and working out these pay-fors to reach that deadline in March."

"I feel like we're stuck where we were last March," Brady added.

Jim McDermott of Washington, Brady's Democratic counterpart on the subcommittee, agreed that disagreement over offsetting the policy is still the issue. He called the money "on-the-books debt" and said Republicans should wipe it out.

Henry A. Waxman of California, the top Democrat on Energy and Commerce, also questioned whether an offset is necessary. Although some GOP lawmakers have said they're open to passing a permanent fix without one, many believe it needs to be paid for.

"It's hard to understand why we have an offset issue with that when we don't with other things that we're passing at the last minute," Waxman said, noting that his hopes are getting "slimmer and slimmer" for the lame duck but that he refuses to give up all hope.

McDermott predicted that Congress will pass another short-term patch, particularly if the cost of the compromise rises, as expected. The Congressional Budget Office estimated last month that the legislation would cost $144 billion over a decade, up from a roughly $138 billion, 11-year projection released in February.

Energy and Commerce Health Subcommittee Chairman Joe Pitts, R-Pa., said he's been pushing for action in the lame duck but received no encouraging signs from leadership. He's concerned that the retirements of several lawmakers who brokered the compromise, plus a potential increase in cost, will make it harder to advance a replacement package in the 114th.

"I think it's easier now than later," he said. A Democratic aide said staff has updated the compromise bill in the unlikely event leaders decide to add it to a year-end package.

Still, Pitts said, lawmakers will try to reintroduce and move the agreement next year before the patch expires in March. And he suggested that instituting "dynamic scoring" could help with the offset issue, maintaining that it could allow the replacement bill to pay for itself over 15 or 20 years.

Brady said he expects the compromise bill to be reintroduced for starters, but that Hatch may have some areas that he wants to look at when he becomes chairman. He noted that the measure could also need to be updated because some original language was incorporated into other legislation.

Restarting the legislative process would also provide an opportunity for other lawmakers to seek changes, despite worries that reopening the debate could lead the deal to unravel. Rep. John Fleming of Louisiana, incoming co-chairman of the GOP Doctors Caucus, said he has concerns about "onerous requirements" related to quality measures.

But with lawmakers headed out of town as soon as next week, McDermott said the matter has already slipped from the immediate agenda.

"It's not going to happen now," McDermott said. "You can bet your lunch on that."

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