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Newsletter Article


One-Year 'Doc Fix' Wins Senate Approval

By Sarah Chacko

March 31, 2014 -- Medicare's system of paying physicians would be "patched" for another year under a bill the Senate cleared last week in a 64-35 vote, a day before doctors' reimbursement rates were scheduled to be cut.

The measure (HR 4302) would avert for one year cuts triggered under the health program's sustainable growth rate formula after the current "patch" (PL 113-67) expires. Without the bill, rates would have been reduced 24 percent.

Prior to the vote, the Senate waived a budget point of order against the bill, 64-35.

A handful of senators said on the floor last week that they are disappointed Congress did not permanently replace the sustainable growth rate formula.

Finance Chairman Ron Wyden, D-Ore., pushed again for consideration of his bill (S 2157) that would permanently replace the sustainable growth rate with alternative models, including one based on performance factors. Wyden said repealing the sustainable growth rate would cost as much as the previous 16 short-term "doc fix" patches, and many are concerned additional patches will follow.

"I think there's a growing awareness that simply extending what we already have and punting on the need to fix the urgent structural problems with what we have ... it can't be ducked much longer," he said.

Wyden's legislation would be paid for with overseas contingency operations funds, which pay for, among other things, operations in Iraq and Afghanistan. That offset raised objections from Republicans. Jeff Sessions of Alabama, the ranking Republican on the Budget panel, said using overseas contingency operations funding is "the mother of gimmicks." He blocked a request to pass Wyden's measure earlier in the day.

Majority Leader Harry Reid, D-Nev., said Wyden's bill did not have the votes to pass the Senate. The patch, however, will ensure older Americans can keep getting health care while lawmakers work on a permanent fix.

"While I'm pleased with this temporary patch, I hope it's our last patch," he said.

Some House Republicans also had hoped to avoid another patch and were surprised by the sudden voice vote by which the legislation passed their chamber last week.

The House measure would continue the current rate increase of 0.5 percent through the end of the year, followed by flat payments through March 2015. It also contains extensions of several Medicare and Medicaid payment provisions, including increased inpatient payments for certain low-volume hospitals and specialized Medicare Advantage plans for individuals with special needs.

To help offset the cost of the payment provisions, the bill would modify the timing of planned cuts to Medicare under the sequester in fiscal 2024 so they are contained within a 10-year budget scoring window.

Under the bill, the cuts would be 4 percent in the first six months of the fiscal year, and zero percent in the second six months. Lawmakers used a similar sequester cut timing modification to pay for the most recent doc fix.

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