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Democratic Leaders Push Ahead with Medicare Physician Payment Legislation

By Alex Wayne, CQ Staff

November 6, 2009 -- House Democratic leaders intend to approve a rule today that would govern debate on legislation to change the way doctors are paid under Medicare, but Majority Leader Steny H. Hoyer, D-Md., said the bill would not be considered until the week of Nov. 16.

The Rules Committee already has a busy afternoon in store: It is expected to also approve a rule governing debate for a $1.1 trillion overhaul of the health system (HR 3962). The committee added the physician-pay bill to its agenda early Friday, calling it an "emergency" action.

Without congressional action, doctors would see their Medicare payment rates cut about 21 percent on Jan. 1, thanks to a budget formula called the "sustainable growth rate," or SGR. The formula has called for cuts in doctors' pay in many of the last nine years, but under heavy pressure from doctors' associations, Congress has reversed the cuts most years.

Now, however, Democrats would like to scrap the SGR and replace it with a formula that would promise doctors regular, inflationary increases in their pay. The American Medical Association, the strongest doctors' lobby, has supported Democrats' health overhaul effort in part because of the promise that the SGR will be repealed.

But a permanent SGR repeal has run into trouble in the Senate, where moderate Democrats demand that its cost—most recently estimated at $210 billion over 10 years—must be offset. That could be difficult, because Democrats have already included steep reductions in the growth of spending in Medicare—the likeliest source of money for the SGR repeal—in their health care overhaul bills, in order to offset the cost of that legislation.

In the House, Democrats who are members of the fiscally conservative Blue Dog Coalition say they will accept a permanent SGR repeal that is not paid for, but only if Congress enacts a law that would codify rules known as "pay as you go," which require most legislation that would increase the deficit to be offset with spending decreases or revenue increases.

That bill is known as "statutory PAYGO," and it has already been passed by the House (HR 2920).

In the Senate, Budget Chairman Kent Conrad, D-N.D., has said he supports the idea of statutory "pay as you go" rules, but he opposes the exemptions to it included in the House bill, such as the Medicare payment fix, arguing they add too much to the debt. Conrad also argues the statutory rule should be part of a larger debate over how to deal with the government long-term budget problems rather than be enacted now.

David Clarke contributed to this story.

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