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'Doc fix' headed to president's desk after easily clearing Senate

Apr 15, 2015

The perennial doc fix debate is nearly history.The Senate voted overwhelmingly on Tuesday to permanently repeal Medicare's despised sustainable growth-rate formula for paying doctors, ending more than a decade of legislative gridlock on the issue. The 92-8 vote staved off a 21.2% cut in payments to doctors one day before the CMS was set to begin processing claims at the reduced rate. President Obama has indicated that he will sign the legislation, ending a cycle of 17 consecutive short-term fixes. The SGR package sets up a new two-track payment system for doctors that's designed to prod them to move more of their patients into risk-based payment models. Doctors that qualify for the alternative payment track will receive higher reimbursement rates starting in 2019.

The legislation also extends the Children's Health Insurance Program by two years and allocates $7.2 billion in additional funding for community health centers. In addition, it includes an array of policy and financing provisions that will have ramifications for healthcare providers, including a six-month delay in enforcement of the CMS' controversial “two midnights” payment policy for short hospital stays. “When the history of Medicare is written people are going to look back and say this was an important day,” said Sen. Ron Wyden (D-Ore.), the ranking member of the Finance Committee, speaking on the Senate floor on Tuesday.
The House passed the SGR package last month by an overwhelming majority, a rare show of bipartisanship. The deal was cooked up behind closed doors by House Speaker John Boehner and Minority Leader Nancy Pelosi.  Only about one third of the $200 billion-plus package was offset by corresponding spending reductions. Those cuts were split roughly evenly between financial hits to providers and increased costs for wealthier Medicare beneficiaries. That failure to pay for the entire package angered conservative Republicans. Democrats were upset by the failure to re-authorize CHIP for four years and by the increased costs for Medicare enrollees.

A half dozen amendments were offered during the floor debate to address those concerns, but each of them failed. That included an amendment from Sen. Mike Lee (R-Utah) that would have required Congress to pay for the entire package. It was defeated by a 58-42 margin, with 12 Republicans joining all Democrats in voting against it. Any changes to the bill would have required that it be sent back to the House for adoption. Boehner had warned the Senate not to force that scenario with the clock ticking down.  "We cannot let the perfect be the enemy of the good on this bipartisan compromise," said Sen. Orrin Hatch (R-Utah), chair of the Finance Committee, during the debate over amendments.

When it came time to vote, most senators put their reservations aside and embraced the opportunity to finally eliminate the Medicare payment formula that was originally enacted in 1997.  "It represents a real step forward for bipartisan healthcare policy," Hatch said. "It's a monumental achievement."