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One-Year 'Doc Fix' Cleared by House

By Ben Weyl, CQ Staff

December 9, 2010 -- The House cleared a measure to provide a one-year extension of Medicare physician payment rates, giving lawmakers up to a year before they revisit the matter, which they already considered several times this year.

The bill (HR 4994) would freeze current payment rates until Dec. 31, 2011, and would avert a 25 percent cut in the rates scheduled to take effect Jan. 1. The measure also would extend several expiring Medicare programs, including protections for rural doctors and hospitals.

The House voted, 409-2, to concur in the Senate amendments to the bill, thus passing the measure, which the Senate passed by unanimous consent . President Obama is expected to sign it.

The bill would be fully paid for, mostly by changing a provision in the health care overhaul (PL 111-148, PL 111-152), the first substantial modification to the landmark legislation.

Until now, lawmakers have only been able to agree to short-term delays, often just before the extensions expired, and sometimes afterward. Physician and patient groups have urged a lengthier extension of the "doc fix," or permanent changes to the underlying payment formula, to provide more stability for the Medicare program. Democrats and Republicans have not been able to agree on how to offset the cost of those proposals.

Obama released a statement calling the measure "an important step forward to stabilize Medicare," but called for a permanent solution and said he looked forward to working on the issue with Congress next year.

The increases in mandatory spending under the bill would be offset primarily by recouping more money from consumers who receive excessive insurance subsidies under a specific provision in the health care law. That provision will provide tax credits to help individuals and families afford insurance on state-run insurance exchanges when they take effect in 2014. If a tax credit recipient misstates income, or if it changes over the course of the year, he or she has to pay back part of the subsidy—up to $250 for an individual or $400 for families.

The measure advanced would replace that flat repayment with a sliding-scale structure, requiring smaller repayments at lower incomes and dramatically increasing the maximum amount for high earners.

The 'First Blow' to Health Care Law?

Lawmakers from both parties praised the agreement, though they warned that a permanent "doc fix" was still necessary. And Republicans said the battle over the health care law—Democrats' signature legislative achievement this year—was far from over.

"Giving physicians a year of certainty in their pay is important to protect Medicare beneficiaries' access to their physicians," said Rep. Pete Stark, D-Calif. "In the long run we all know we need to do much better by Medicare than continued one-year patches on the physician payment formula."

Wally Herger, R-Calif., noted approvingly that Congress was acting in "a bipartisan way" and "a fiscally responsible manner," but added that he saw it as "pulling at the thread that will begin to unravel Obamacare."

"Let it be known on this day in the people's House the dismantling of Obamacare begins," Herger said. "Once the House passes this bill and the president signs it into law, we will have landed the first blow to the Democrats' massive health care overhaul."

That came as news to New Jersey Democrat Frank Pallone Jr., who strongly disagreed with Herger's characterization.

"There is nothing in this bill that would any way disrupt or repeal the health care reform," Pallone said. "If there was any remote suggestion that we were repealing, or this was the beginning of the repeal, as the gentleman suggested, of the health care reform, not one Democrat would support that."

Pallone called the yearlong extension "a vital piece of legislation for America's seniors, persons with disabilities and military families," and a good stopgap "until we can work out a permanent solution."

Groups React

The House's action garnered praise from a variety of stakeholders, but most also prodded Congress to address the issue on a permanent basis.

Joe Baker, the president of the Medicare Rights Center said that in passing the measure, "Congress did right by people with Medicare." But Baker stated, "We also hope that Congress uses the next year to work with the Centers for Medicare and Medicaid Services (CMS) to create a long-term fix that preserves Medicare patients' access to care and relationships with their physicians."

Cecil B. Wilson, president of the American Medical Association, agreed, praising the House vote but pledging to work "closely with congressional leadership in the new year to develop a long-term solution to this perennial Medicare problem for seniors and their physicians."

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