House Backs Out on "Doc Fix" Deal

December 19, 2011

The House of Representatives is reneging on a deal to postpone drastic cuts in Medicare payments to physicians.

On Saturday the Senate voted 89-10 to approve a two-month delay in a 27 percent reduction in the payments, slated to kick in January 1. The measure was part of a larger bill to extend a payroll tax cut. 

House Speaker John Boehner had earlier indicated that he supported the move, but the day after the Senate vote he announced that a majority of House members oppose the fix.

Boehner said that some Republican House members wanted at least a one year extension of the current payment rate. House and Senate negotiators had earlier failed to reach agreement on a one year fix, instead settling on the two-month compromise.

The payment cut is tied to the sustainable growth rate (SGR) formula that indexes Medicare physician payments to increases in the gross domestic product. While the reimbursement rate has surpassed growth in GDP, Congress has repeatedly raised the payment rate.

Congress has suspended the SGR more than a dozen times over the past decade.

Without a permanent adjustment to the SGR, doctors are regularly at risk of having their payments reduced. But a permanent fix would create a large, one-time budget item costing tens of billions of dollars in new spending, which neither party wants to appear responsible for in this deficit-conscious time.

The American Medical Association was critical of the two-month plan, but reserved the greater blame for Congress waiting until the eleventh hour to come up with a fix. 

 "Waiting until the last week of the legislative session to address a problem that Congress knew was looming all year is not the way to conduct our nation's business," AMA president Peter Carmel, MD, said in a statement.

According to the AMA, passing stopgap fixes instead of making a permanent adjustment in the underlying law has actually cost the federal government more money in the long run. 

The House, originally scheduled to vote on the legislation containing the payment fix on Monday night, postponed action until Tuesday.

It is not certain if House members have an issue with the brevity of the extension alone, or are attempting to gain leverage to alter some other aspect of the bill.