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House Votes to Block Cuts to Physician Payments

By Drew Armstrong and Meghan McCarthy, CQ Staff

November 19, 2009 -- The House passed a bill Thursday that would stop a scheduled cut in Medicare physician payment rates scheduled for January and would restructure the formula that determines how doctors are paid under the federal health care program.

The bill (HR 3961), which passed, 243183, would block a 21 percent physician- payment cut required by a 1997 formula originally designed to control costs. The formula has called for cuts for most of the past decade, forcing Congress to step in to maintain the status quo. The most recent of those "fixes" was enacted in 2008.

The measure would restructure the formula on a long-term basis beginning in 2011, taking into account spending since 2009 or, beginning in 2014, spending for the previous five years. It would provide two separate updates, one for evaluation, management and preventive services, and another for other services.

"What this legislation does is do away with a gimmick," said John D. Dingell, D-Mich. "I would remind my colleagues that HR 3961 solves a problem that's plagued the Congress since 2002 and actually ends a budget gimmick that artificially reduces the deficit by assuming physician payments will be cut by 40 percent over the next several years,"

The legislation has become a priority for the White House, which is concerned that steep payment cuts could prevent patients from seeing the doctors of their choice.
The White House issued an official statement of administration policy that supports the House effort. "A cut of this magnitude could reduce access to physicians for Medicare beneficiaries throughout the country," according to the statement, which was issued Wednesday.

Even so, action in the Senate is unclear. Senators rejected a similar bill (S 1776) in October, voting down a procedural motion, 47–53. Majority Leader Harry Reid, D-Nev., has promised to bring the physician payment bill back up after the Senate finishes work on a health care overhaul, which could mean sometime in 2010.

Although the House bill's language will not technically become part of the health care overhaul (HR 3962) that passed Nov. 7, it is a critical part of the broader health care picture.

"This is not a mere problem with mere budgeting," said Democrat Henry A. Waxman of California, the chairman of the House Energy and Commerce Committee. "It's a kitchen table problem for America's seniors and for the physicians who are partners in the Medicare program."

But Republicans said the measure would only add to the nation's deficit.

"The issue here is twofold," said Minority Leader John A. Boehner of Ohio. "One is that the proposal will not fix the problems that docs have in terms of their reimbursement down the road. It is a flawed formula that is not eliminated in this proposal. Secondly, it's going to add some $250 billion worth of debt put onto the backs of our kids and grandkids."

Joe L. Barton of Texas, the ranking Republican on the Energy and Commerce panel, said the bill was "nothing more than a political payoff to the American Medical Association" for the group's support of the House health care overhaul.

According to the Congressional Budget Office, the House bill would cost $210 billion over a decade. The spending is not offset in the measure, but provisions of the fiscal 2010 budget resolution (S Con Res 13) would prevent the measure from violating pay-as-you-go rules.

The rule governing floor debate of the measure provided for the incorporation of another bill (HR 2920) upon passage. The added language would make pay-as-you-go budget policies statutory, meaning that most new spending would have to be offset. The language provides exemptions for certain policy areas, however, including legislation regarding physician payments.

Adding the language to the doctor bill was a requirement for winning the support of fiscally conservative "Blue Dog" Democrats.

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