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Health Policy Week In Review: Senate Stalls On Jobs Broad Bill But Passes Medicare Pay Fix For Doctors

This week, Senate Democrats were unable to pass a tax extender bill that included provisions to prevent scheduled reductions in physicians’ Medicare payments and to extend enhanced federal Medicaid funding. After a five-day legislative saga, they chose Friday to break out the Medicare provision, which passed, and leave the other key concerns on the table.  

The provision blocks the 21 percent cuts to Medicare physician pay for six months. The Senate Thursday failed to pass the larger legislation extending tax and jobless benefits, The Hill reports. The Medicare fix will now need to be considered by the House, which in May approved a pay fix that would last longer. Sens. Max Baucus, D-Mont., and Charles Grassley, R-Iowa, cut the deal for doctors’ pay Thursday night. It will replace the pending pay reductions with a 2.2 percent raise. The pay cut “was scheduled to go into effect June 1,” although the agency that oversees Medicare had delayed implementing the cuts until Friday (Needham, 6/18).

According to CongressDaily, Baucus expressed relief that physicians will be paid “and more importantly, seniors will get the benefits they deserve.” Also, “[t]he $6.5 billion ‘doc fix’ price tag is fully offset with two revenue-raising provisions. One would ban hospitals from charging Medicare for outpatient and inpatient services rendered within 72 hours of a hospital admission, estimated to save $4.2 billion. The other would raise $2.8 billion by allowing companies to spread out their pension fund obligations over a longer period” (McCarthy, 6/18).

But the struggle to reach this point began Monday, when Senate Majority Leader Harry Reid filed a motion to stop debate on the broader tax extender and jobs bill. According to Roll Call, this step suggested Reid thought he was close to having the votes for passage” (Brady, 6/14). But by mid-week, it became clear this calculation was not on target. The Wall Street Journal reported that the Democratic-backed procedural vote Wednesday to end debate on the measure failed, 52 to 45, leaving Democratic leaders to scramble to salvage part of the measure in the midst of bipartisan demands to lower the cost (Hitt and Boles, 6/17). Congress Daily explained how the new Medicare pay fix approach would save “$16.4 billion by postponing the physician payment cuts only through November, down from 19 months” (6/17). And The Associated Press noted, “Despite the loss, Democratic leaders predicted serenely that a scaled-back version … could pass, possibly as early as later this week, after relatively minor revisions”   (Taylor, 6/17).

On Thursday, though, the Democrats’ predictions proved wrong as Republicans successfully blocked the bill’s passage with the help of Sens. Ben Nelson, D-Neb., and Joseph Lieberman, I-Conn., The Washington Post reported. The approximately $120 billion measure “needed 60 votes to advance, but garnered only 56.” Democrats had hoped the shorter-term fix for Medicare doctor payment rates could attract the votes of the two lawmakers and one or two Republicans (Montgomery and Dennis, 6/18).

Afterward, according to The Associated Press, the Medicare pay issue became both a flash point for Democrats’ criticism of their GOP counterparts. “‘Tonight, every single Republican voted to give doctors a 21 percent pay cut,’ Reid said.” But Senate Minority Leader Mitch McConnell, R-Ky., appeared amenable to the compromise on doctors pay (Taylor and Ohlemacher, 6/17).

In the background, The Wall Street Journal and Kaiser Health News reported on the frustration of physicians, who again found themselves in a holding pattern — waiting for the payment issue to be resolved. According to KHN, “While lobbyists urge Congress to enact a permanent payment fix to provide stability to the system, doctors in individual practices regularly brace for the reimbursement roller coaster” (Marcy, Villegas and Weaver, 6/15).

And, even with the Senate’s Friday vote, MedPage Today reported that the Medicare agency still began paying doctors 21 percent less Friday. “The lower reimbursement rate technically went into effect on June 1, but CMS had announced that it would not process claims for medical services delivered after the deadline, giving Congress additional time to block the 21% cut. This most recent grace period — CMS has issued four such reprieves this year — expired on June 17” (Walker, 6/18).

Meanwhile, the future and timing of the broader bill, which includes an extension of enhanced federal Medicaid funding for states, is unclear. KHN’s Daily Reports on June 16, June 17 and June 18 provide coverage of states’ concerns about the budgetary impact if Congress doesn’t provide this continued assistance.  

KHN’s Daily Reports on June 15,  June 17 and  June 18 summarized the coverage of the legislative effort related to the sweeping tax extender and jobs bill.

Despite their difficulties on the jobs bill this week, House Democrats were able to beat back a Republican effort to repeal the requirement that individuals have health coverage, a key provision of the recently enacted health care overhaul. Still, 21 Democrats voted for the GOP amendment, but Roll Call noted that Democratic aides said that “signified growing support for the health care bill, which was opposed by 34 Democrats in March. … The individual mandate was a central flash point in the protracted debate over remaking the nation’s health care system” (Hunter, 6/15).

“Most of the Democrats who voted for repeal are from conservative-leaning districts and voted against the health care bill earlier this year as well,” The Washington Times reported. “Still, House Republicans saw political targets in the vote. Their campaign committee immediately fired off an e-mail aimed at more than 50 Democrats who voted against repeal” (Dinan, 6/15).

That individual mandate is also at the heart of the lawsuit filed by 20 states in federal court in Florida seeking to overturn the law. Responding to that suit this week, the Obama administration says it has constitutional power to regulate interstate commerce and impose taxes, The Wall Street Journal reported. The response argues that the law doesn’t mandate Americans buy insurance but taxes those who do not have coverage. “Congress was entitled to pass a law punishing people who go without coverage because their decision could impose future costs on the nationwide health system, the filing said.” The filing also argued that the states don’t have standing to challenge the law, because the provisions in question don’t take effect until 2014 and therefore all damages are “speculative” (Adamy and Perez, 6/18).

Still, the response brought criticism from Republicans. Florida Attorney General Bill McCollum, one of the leaders of the state lawsuit effort, said “that the government’s defenses clash with comments Obama made during the health care debate, ‘including the president’s insistence on national television that the purchase mandate was absolutely not a tax,'” The Associated Press reported. “In its arguments for the motion to dismiss, the Justice Department says the requirement to buy coverage is an exercise of Congress’ constitutional power to tax and spend. ‘The Supreme Court has long held that an exercise of this power is valid, even if it has a regulatory function, even if the revenue purpose is subsidiary, and even if the moneys raised are ‘negligible,” wrote a team of government lawyers led by Assistant Attorney General Tony West.” The judge set a Sept. 14 hearing date on the motion to dismiss (Kaczor, 6/17).

But supporters of the health overhaul may also have been heartened by reports that fewer people are opposing the law. The Associated Press reported, “A new Associated Press-GfK poll finds public support for President Barack Obama’s new health care law has risen to its highest point. The nation remains divided, with 45 percent in favor and 42 percent opposed to the president’s signature domestic accomplishment.” Last month, the poll found that 39 percent supported the bill and 46 percent opposed it (Alonso-Zaldivar and Tompson, 6/17).

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