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Congress’ Full 2012 Plate: The ‘Doc Fix,’ The Health Law And Automatic Cuts

KHN’s Mary Agnes Carey talks with Jackie Judd about what a divided Congress returns to in Washington this month as it begins dealing with fixing how Medicare pays doctors. A conference committee has until the end of February to fix the so-called “Sustainable Growth Rate” or doctors face a big pay cut.

>> Listen to the audio.

Here’s a transcript:

JACKIE JUDD: Good day. This is Health On The Hill. I’m Jackie Judd.

It’s a new year, but Congress will turn to some of the same old issues, when lawmakers come back to Capitol Hill later this month. Chief among those issues is what to do about reimbursing doctors who treat Medicare patients. But there others, and here to fill us in is KHN correspondent Mary Agnes Carey. Happy new year, Mary Agnes.


JACKIE JUDD: Before Congress left in December, they put into place this two-month fix that essentially froze the levels of reimbursements to doctors. That expires at the end of February. In Congress time, that’s no time at all. So what happens when they return in mid-January?

MARY AGNES CAREY: A House and Senate conference committee – this is a bicameral, bipartisan panel – will sit down to try to resolve these differences. But he same obstacles remain that were there before the holiday break: How large of a fix do you pass? How do you finance it? The numbers are fairly daunting: It’s $21 billion for a one-year fix, about $38 billion for a two-year fix. And if you wanted the problem to go away forever, that would be $300 billion over the next decade.

Another pressure here is the calendar. Presidents Day recesses are scheduled now for the Senate and the House. In the Senate, Presidents Day recess is scheduled the 20th through the 24th of February. And the House, of course, as a different week, the 18th through 26th. So that creates even more pressure.

JACKIE JUDD: You raised the issue of how to finance a fix, so that there is not a 27 percent cut in reimbursement rates. The idea that the Republicans put forth late last year was to make some cuts in Medicare spending, to make some cuts in health reform, where they could find some revenue. Are there any other ideas floating out there so that the ball can be moved?

MARY AGNES CAREY: Some lawmakers – one that comes to mind is Jon Kyl, who is the second-ranking Republican in the Senate, has said, let’s take the savings from Iraq and Afghanistan, that war drawdown money, and use that to get rid of the SGR forever. That doesn’t have a lot of appeal with the House Republicans, so I’m not quite sure if that will get traction. But as you note, Congress seems to be going to the tried and true. Do you reduce the hospital payments? Do you reduce payments for skilled nursing facilities?  There’s been debate about asking Medicare beneficiaries who have higher income to pay even more to help fund their coverage. So a lot of the old ideas are on the table, perhaps some new ideas, and they may come up with some things we haven’t even thought of.

JACKIE JUDD: Jon Kyl is among the 20 members on the conference committee. Each side has appointed those they want to serve. Can you divine anything from the make-up of this group?

MARY AGNES CAREY: Well, you do have some prominent members of committees of jurisdiction. In the Senate, for example, you’ve got Max Baucus, who runs the Senate Finance Committee, a Democrat. In the House, you’ve got Dave Camp, who runs Ways and Means – he’s a Republican from Michigan. Another Michigan Republican, Fred Upton, runs the Energy and Commerce Committee. And there are some freshman faces. In the House Republicans, for example, you’ve got Renee Ellmers of North Carolina and Nan Hayworth of New York. So you’ve got some new blood; you’ve got some established players. But again, the difficulties remain in this. There are deep philosophical divides between the parties on how to approach many issues that are involved in this. The payroll tax cut is one. The Medicare “doc fix.” And so, I think, ultimately, we may see this going back to the leadership level, just as it did before the break, to try to reach a resolution that will get enough support in both the House and the Senate.

JACKIE JUDD: As I said at the top: New year, some old issues.  What other issues or questions must the Congress face as this year unfolds?

MARY AGNES CAREY: I think you’ll continue to hear a lot from House Republicans about the health law; they don’t like it. They’ve tried numerous times to repeal it or defund it. While those attempts to repeal the law or defund it passed in the House, they’re stopped cold in the Senate. And even if for some reason, it got to President Obama’s desk, he would certainly veto that. But I think you’ll continue to hear that. Republicans want to do as much as they can to point out what they think are the weak spots in the health law to the public. They don’t like the Medicaid expansion. They don’t like the individual mandate that you have to purchase insurance. They have concerns about how high the subsidies are that allow people to purchase coverage on the exchanges in 2014. So you’ll hear a lot about that issue.

On Medicare, Paul Ryan, who is the head of the House Budget Committee may come back with his budget resolution, his Medicare proposal, again, that would provide a limited amount of money to help people purchase coverage. He’s revised that recently with Ron Wyden, a Democratic senator from Oregon, that would keep fee-for-service in the mix. But Paul Ryan’s views have been very controversial. You could expect to see that again, more discussion about it. And as we know, with the failure of last year’s super committee, there are automatic cuts set to begin next January, in 2013. You may find members of both parties very interested in looking at some way to stop sequestration. On health care, of course, we remember that in Medicare, the providers are shielded at 2 percent cuts and there’s no cuts in Medicaid.  But with 50 percent of that money coming from defense and 50 percent non-defense programs, again, there’d be bipartisan interest in trying to stop that.  But the problem is where do you get the money?

And of course, we talked about the individual mandate earlier.  All eyes will be on the Supreme Court. Briefs are being filed this month and next month, February, oral arguments in March, a decision in June, and of course we have the elections this fall. So what the Supreme Court says or doesn’t say about the health law may very well play into the elections.

JACKIE JUDD:  A full calendar.

MARY AGNES CAREY:  Absolutely.

JACKIE JUDD:  Thank you so much, Mary Agnes Carey of Kaiser Health News.


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